tag:blogger.com,1999:blog-6350403003031173182024-03-08T09:54:42.582-08:00The Fid GuruInsights on Fiduciary Liability Insurance from the Underwriters at Euclid Specialty ManagersEuclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-635040300303117318.post-60797381177889163132013-07-23T06:48:00.000-07:002013-07-23T13:39:32.476-07:00DOL Permits 401(k) Plans to Reschedule Annual Comparisons to Employees to Combine with Other Annual DisclosuresThe Department of Labor has announced a temporary enforcement policy that allows 401(k)-type defined contribution plans to reset the timing for the annual distribution of the investment comparative chart that they are required to furnish to plan participants. Under the enforcement policy contained in Field Assistance Bulletin 2013-02, plan administrators may reset the deadline one time, for either the 2013 or 2014 comparative chart, if the responsible fiduciary determines that doing so will benefit the plan's participants and beneficiaries, and provided that no more than eighteen (18) months may pass before participants receive their next comparative chart. The DOL was responding to requests from plan administrators and service providers to provide plans more flexibility so that the annual deadline for furnishing comparative charts could be aligned in a cost-effective manner with the furnishing of other participant notices and disclosures. <br />
<br />
The DOL's participant-level fee disclosure regulation (published in 29 CFR section 2550.404a-5), which was implemented last year, requires that administrators of 401(k)-type plans disclose information about plan investment options, such as fee and performance information, to participants and beneficiaries at least annually. Plans operating on a calendar year had to furnish their first chart no later than August 30, 2012, and their second chart is due no later than August 30, 2013. Many other plan disclosures, however, such as pension benefit statements, are disclosed later in the calendar year. Permitting a one-time "re-set" of the deadline will allow plan administrators to align the comparative chart with other participant disclosures. <br />
<br />
This enforcement policy does not alter a plan administrator's obligations under the regulation to timely update the investment information that is available at the plan's internet web address or to notify participants about changes to investment information, such as a new plan investment option.<br />
<br />
The Employee Benefits Security Administration (EBSA) acknowledges in the Field Assistance Bulletin that it has not addressed concerns that the current timing requirement may result in a fixed annual deadline for comparative charts. Accordingly, EBSA stated that it is considering whether to revise the regulation's timing requirement to provide reasonable flexibility to plan administrators on a permanent basis.<br />
<br />
<strong><u>The Fid Guru's Take</u>: </strong>This FAB demonstrates that the EBSA under Assistant Secretary for Employee Benefits Security Phyllis C. Borzi is responsive and cares about the concerns of the employee benefits community. Nevertheless, EBSA is still operating on the premise that disclosures make a difference. As investment scandals like the recent Madoff ponzi scheme demonstrates, individual investors do not read most, if any, disclosures. More disclosures will not solve the problem. Indeed, the regulatory premise of requiring disclosures is likely naive -- many of these disclosures will not even be opened, regardless of when they are sent.Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-75166801974667490952013-07-19T12:36:00.002-07:002013-07-19T12:36:18.997-07:00Reporting Penalties -- Notice Deficiency Must be EgregiousA recent growing trend in fiduciary liability claims is the demand for penalties for a Plan's purported failure to provide notices of benefit changes. ERISA Section 204(h) requires the administrator of a defined benefit plan to provide advance notice of a plan amendment that reduces future benefit accruals, or reduces early retirement benefits on a prospective basis. Failure to provide the Section 204(h) notices can result in the imposition of a $100 per participant penalty tax for each day until the failure is corrected. In addition, an "egregious" failure to provide the notice can result in the amendment being nullified, so that the benefits eliminated by the amendment are restored. <br />
<br />
In <em>Jensen v. Solvay Chemicals, Inc.</em>, No. 11-8092 (July 2, 2013), the Tenth Circuit Court of Appeals recently affirmed a district court's determination that employees were not entitled to any relief for their employer's violation of ERISA Section 204(h) notice requirements because the employees had failed to establish that the notice deficiency was "egregious." The Court also held that the employees could not maintain a claim for promissory estoppel under ERISA Section 502(a)(3) because they could not demonstrate that they were influenced by the notice's deficiency. <em>Solvay</em> dealt only with whether the failure was egregious, and not with the potential implication of the $100 per day penalty tax. <br />
<br />
<strong>Background</strong><br />
<em></em><br />
Solvay converted its defined benefit plan into a cash balance plan and sent a notice to all participants. The lower court ruled that the company properly described all of the benefit changes, but the appellate court held that the company failed to properly describe the elimination of early retirement subsidies, and remanded the case for the lower court to determine whether and what relief was warranted for this single violation. Following a bench trial, the district court concluded that no relief was warranted because the employees had not proved that the notice failure was "egregious" under ERISA. ERISA Section 204(h)(6)(B)(i), 29 U.S.C. section 1054(h)(6)(B)(i), provides in part that a company's Section 204(h) notice failure is "egregious" if the failure was "within [its] control" and was "intentional," or if the failure was "within [its] control" and the company failed "to promptly provide the required notice or information after [it] discov[ed] an unintentional failure to meet the requirements of" Section 204(h). <br />
<br />
On appeal, the Tenth Circuit upheld the district court's conclusion that the company wanted to make all required disclosures and the omission about early retirement benefits "was accidental, no more than an oversight in the process of drafting a complex statutorily mandated notice." <br />
<br />
The employees alternatively filed an "Amara" claim under Section 502(a)(3) claim for promissory estoppel. The court determined that the employees were not able to recover under a promissory estoppel theory because they were admittedly not influenced by the deficient notice in that they were well aware that they were losing certain benefits under the new plan. In other words, the plaintiff participants could not recover because they did not detrimentally rely on the omission in the company's notice [i.e., no one retired early expecting benefits, only to discover that the plan had been changed].<br />
<br />
<strong><u>Fid Guru's Take</u><em>:</em></strong><em> Solvay</em> is useful precedent to combat the growing trend of plaintiff lawyers filing claims based on alleged disclosure violations. This case demonstrates that inadvertent mistakes -- accidentally leaving out even some material information -- will not justify recovery under ERISA, at least not nullifying the benefit change. The Court unfortunately did not address whether plaintiffs met the standard for $100/day penalties. It would have been interesting whether participants can recover penalties even when a notice, albeit with a deficiency, was sent out. In any event, this case demonstrates how important it is to ensure that your plan has fiduciary liability insurance coverage for reporting penalties under 502(c) and coverage for Amara-type equitable relief -- not all policies provide these coverages. Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-73094485221531747342013-05-31T11:02:00.000-07:002013-05-31T11:02:38.069-07:00<strong>Government Issues New Wellness Program Regulations: Five Requirements for Health-Contingent Programs</strong><br />
<strong></strong><br />
The U.S. Departments of the Treasury, Labor, and Health and Human Services issued final regulations this week amending the 2006 HIPAA nondiscrimination regulations to implement the employer wellness program provisions of the Affordable Care Act. Wellness programs come in two types: <strong>"participatory wellness programs" </strong>and<strong> "health-contingent wellness programs."</strong> Under the final rules, participatory wellness programs comply with the HIPAA nondiscrimination requirements as long as the participant does not have to satisfy any additional standards and participation in the program is made available to all similarly situated individuals, regardless of health status. By contrast, health-contingent wellness programs, which condition a reward on a participant's satisfaction of a standard related to a health factor, face new requirements. The final rules apply to both grandfathered and non-grandfathered group health plans in both the insured and self-insured markets, and are effective for plan years beginning on or after January 1, 2014.<br />
<br />
The final rules distinguish between two types of health-contingent wellness programs: "activity-only" programs and "outcome-based" programs. An activity-based wellness program provides a reward if an individual performs or completes an activity related to a health factor, but it does not require the individual to satisfy any specific health outcome. Examples include waking or exercise programs in which a reward is provided just for participation, or rewards for taking a health risk assessment without requiring any further action. An outcome-based wellness program requires an individual to either attain or maintain a specific health outcome in order to obtain a reward. Examples are not smoking or achieving certain results in biometric screenings.<br />
<br />
<strong>All health-contingent programs must meet five requirements under the final rules:</strong><br />
<br />
<strong>(1) Eligible employees must be given an opportunity to qualify for the reward at least once per year.</strong><br />
<br />
<strong>(2) Generally, the reward may not exceed 30% of the total cost of employee-only coverage</strong> (including both the employee and employer portion of the cost of coverage). If dependents are permitted to participate, the reward can be calculated on the basis of 30% of the cost of coverage in which the employee and any dependents are enrolled. In the case of a program designed to reduce or prevent tobacco use, the maximum reward amount is 50% of the total cost of coverage. The reward limit is cumulative for all health-contingent wellness programs.<br />
<br />
<strong>(3) The program must be reasonably designed to promote health or prevent disease.</strong><br />
<br />
<strong>(4) For an activity based wellness program, the full reward must be available to all similarly situated individuals by offering a reasonable alternative standard for obtaining a reward if it is either unreasonably difficult due to a medical condition to satisfy or medically inadvisable to attempt to satisfy the otherwise applicable standard.</strong> A wellness program can require verification from a physician that an individual's health factor makes it unreasonably difficult or medically inadvisable to attempt to satisfy the regular standard.<br />
<br />
<strong>For an outcome-based wellness program, the full reward must be available to anyone who does not meet the standard based on the initial measurement, test, or screening. </strong> The alternative standard cannot be a requirement to meet a different level of the same standard without additional time to comply, and the time commitment to comply with the alternative standard must be reasonable. <br />
<br />
<strong>(5) The availability of a reasonable alternative standard to qualify for the reward must be disclosed in all materials describing the terms of the wellness program. </strong>For an outcome-based wellness program, a similar statement must be included in a notice that the individual did not satisfy the initial outcome-based standard. Sample language is included in the final rule.Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-76327973779679428322013-01-17T09:53:00.001-08:002013-01-23T08:27:51.271-08:00Takeaways from NCCMP<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Euclid Specialty underwriters enjoyed attending the National Coordinating Committee for Multiemployer Plans (“NCCMP”) Annual Conference.<span style="mso-spacerun: yes;"> </span>We thought it was the most informative NCCMP conference in recent years.<span style="mso-spacerun: yes;"> </span>For those of you who could not attend, here are our thoughts on the major topics discussed at the conference.<br style="mso-special-character: line-break;" /><br style="mso-special-character: line-break;" /><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">1.</span></b><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"> <span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;"><u>Multiemployer Funding Levels Are Improving.</u></b></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span></b><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">In his annual report, Josh Shapiro, Deputy Executive Director for Research and Education for NCCMP, reported that multiemployer plans are “on the path to recovery.”<span style="mso-spacerun: yes;"> </span>Although “it will take many years,” they are now in a “positive direction.”<span style="mso-spacerun: yes;"> </span>He reported that many of their surveyed funds had utilized the 2010 statutory relief tools, including thirty-year amortization, 10-year smoothing of assets, and the 130% corridor.<span style="mso-spacerun: yes;"> </span>Specifically, in 2011, multiemployers funds in the NCCMP survey were 84% funded on the PPA actuarial value basis and 75% on a market value basis (with no actuarial smoothing).<span style="mso-spacerun: yes;"> </span>This compares to 2009 survey funding levels of 77% on an actuarial value basis and 65% on a market value basis.<span style="mso-spacerun: yes;"> </span>In 2011, 59% of the funds were in the green zone, 17% in the yellow zone, and 24% in the red zone; this compares to 2008 survey results of 76% green zone, 15% yellow zone, and 9% red zone.<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;"><u><o:p></o:p></u></b></span></span></div>
<span style="color: black;"></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"></span></b><br />
<span style="color: black;"><a name='more'></a></span><div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;">2. <span style="mso-spacerun: yes;"> </span><u>Apprenticeship and Training Funds</u>:</span><br />
</div>
<span style="color: black;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The most contentious topic of the conference was the Department of Labor’s “DOL’s” continued enforcement crackdown on expenses for graduation ceremonies for apprenticeship and training funds.<span style="mso-spacerun: yes;"> </span>Phyllis Borzi, Assistant Secretary of Labor and head of the Employee Benefits Security Administration, said the DOL is trying to settle the 120-plus pending investigations of apprenticeship funds.<span style="mso-spacerun: yes;"> </span>To her, the question is what is reasonable and necessary in running an apprenticeship fund.<span style="mso-spacerun: yes;"> </span>Specifically, any expense must be related to the training purposes of the fund.<span style="mso-spacerun: yes;"> </span>In answering frustrated trustees at both her convention speech and the break-out session, she repeated twice that “you can’t have a graduation ceremony that looks like a wedding or a Bar Mitzvah.”<span style="mso-spacerun: yes;"> </span>She said it was a “fact and circumstances test” in which “modest” ceremonies and gifts are “OK.”<span style="mso-spacerun: yes;"> </span>Borzi indicated that the DOL would be issuing further guidance for apprenticeship funds.<span style="mso-spacerun: yes;"> </span></span></span><br />
<span style="color: black;"></span><br />
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">3.<span style="mso-spacerun: yes;"> </span><u>Reproposal of the Definition of Fiduciary</u>:</span></b><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The DOL intends to issue a “reproposal” to update the definition of fiduciary in the beginning of 2013.<span style="mso-spacerun: yes;"> </span>The DOL’s goal with the new definition of fiduciary is to “protect workers from biased advice.”<span style="mso-spacerun: yes;"> </span>Phyllis Borzi explained that third-party payments and revenue sharing “seem like a conflict of interest.”<span style="mso-spacerun: yes;"> </span>The new definition of fiduciary, therefore, will seek to bring “transparency and accountability” to these arrangements, but provide prohibited transaction amendments as well.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">The DOL had proposed a new definition of fiduciary under ERISA on October 10, 2010, but withdrew its initial proposal after significant comments from the investment community.<span style="mso-spacerun: yes;"> </span>The DOL remains concerned that problems exist with the current definition of fiduciary under the 1975 regulation.<span style="mso-spacerun: yes;"> </span>In particular, the DOL is concerned that many investment advisors that provide fiduciary advice on a one-time basis escape fiduciary responsibility because they do not offer advice on a “regular basis” as the regulation requires.<span style="mso-spacerun: yes;"> </span>Similarly, the DOL thinks it is problematic that some fund advice would not qualify under the current definition of fiduciary if the client relied in part, but not primarily, on advice from a potential fiduciary.<span style="mso-spacerun: yes;"> </span>Phyllis Borzi stated that the DOL is conducting more transparent economic analysis to respond to the objections to the initial proposal.<span style="mso-spacerun: yes;"> </span>Louis Campagna, Chief, Division of Fiduciary Interpretations Office of Regulations and Interpretations of the DOL, further explained that the re-proposal would set a “clear-line test” distinguishing between investment advice and investment education.<span style="mso-spacerun: yes;"> </span>He also clarified that any new definition would also add exemptions to the prohibited transactions rules if the fee practices were beneficial to the fund.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">4.<span style="mso-spacerun: yes;"> </span><u>Affordable Care Act (“ACA”)</u>:</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span></b><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The multiemployer community has rallied behind the leadership of NCCMP under the common goal to preserve the high quality of affordable care provided by multiemployer plans.<span style="mso-spacerun: yes;"> </span>Since existing Taft-Hartley trusts are not currently eligible for ACA subsidies, NCCMP advisors have proposed establishing after-tax supplemental trusts to become eligible for subsidies.<span style="mso-spacerun: yes;"> </span>Alternatively, a union multi-state plan could be established under the multi-state option of the ACA statute.<span style="mso-spacerun: yes;"> </span>Although the possibilities are complex, plans evaluating their options must have a better understanding of household income of their participants in order to value ACA subsidies.<span style="mso-spacerun: yes;"> </span>Not every subsidy-eligible person will be in the supplemental trust, because the subsidies are diminished for higher income employees.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Borzi described the Affordable Care Act as “unforgiving and not well drafted.” She stated that the statute was “not drafted in a clear and straightforward fashion,” which is “extremely frustrating to EBSA.”<span style="mso-spacerun: yes;"> </span>The DOL has been sued in 170 cases alleging that the Department exceeded its authority, and this in turn limits the Department’s discretion in enacting regulations.<span style="mso-spacerun: yes;"> </span>She said EBSA cannot be perceived as doing a “special deal” for labor plans, because they need a strong statutory basis for anything they do.<span style="mso-spacerun: yes;"> </span>But EBSA “will do everything in our power to make it serviceable.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">5.<span style="mso-spacerun: yes;"> </span><u>401k Fee Disclosure</u>:</span></b><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The DOL wants to bring greater transparency and accountability to defined contributions plans.<span style="mso-spacerun: yes;"> </span>To do this, the DOL has published a final rule adopting disclosure requirements for retirement plan service providers under Section 408(b)(2) of ERISA.<span style="mso-spacerun: yes;"> </span>The final rule requires “covered service providers” to disclose certain information to plan fiduciaries in order for a contract or arrangement with the provider to the plan to be “reasonable” within the meaning of ERISA section 408(b)(2) and, therefore, satisfy the statutory exemption from ERISA’s prohibited transaction rules.<span style="mso-spacerun: yes;"> </span>Responsible plan fiduciaries of “covered plans” must ensure all “covered service provider” contracts and arrangements comply with the disclosure requirements of the Final Rule by the July 1, 2012 effective date.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Louis Campagna highlighted two aspects of the new rules.<span style="mso-spacerun: yes;"> </span>First, fiduciaries need to send a disclosure failure notices when appropriate to avoid the expense becoming a prohibited transaction.<span style="mso-spacerun: yes;"> </span>Second, Campagna questioned whether reimbursement of trustee expenses must be disclosed under Rule 408(b)(2).<span style="mso-spacerun: yes;"> </span>Surprisingly, he did not have a DOL position on the question, although one plan lawyer noted that trustees do not need to disclose expense reimbursements because trustees do not contract with the plan like a service provider.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">6.<span style="mso-spacerun: yes;"> </span><u>Vendor Expenses</u>:</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"> </span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span></b><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">Phyllis Borzi reported that the DOL is focusing on the reasonableness of expenses paid to vendors, including investment managers and consultants.<span style="mso-spacerun: yes;"> </span>She said that they are seeing with “increasing regularity” that investment managers and consultants are attempting to disclaim liability for fiduciary responsibility.<span style="mso-spacerun: yes;"> </span>She opined that it may be a breach of fiduciary duty for trustees to allow this type of disclaimer. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">7.<i style="mso-bidi-font-style: normal;"><span style="mso-spacerun: yes;"> </span></i><u>PBGC</u>:</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="mso-spacerun: yes;"> </span></span></b><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The PBGC gave a summary of its MAP-21 changes. It reported that the annual premium for multiemployer plans has been raised from $9 per participant to $12 in 2013.<span style="mso-spacerun: yes;"> </span>$1.7B is available for multiemployer plans, which is well below projected funding needs.<span style="mso-spacerun: yes;"> </span>The PBGC noted the significant drop in active population for multiemployer plans, as less than one-half of all multiemployer participants are active employees.<span style="mso-spacerun: yes;"> </span>In the PBGC’s opinion, the funds cannot recover based solely on contributions.<span style="mso-spacerun: yes;"> </span>In 2011, 49 plans are receiving PBGC financial assistance out of 1460 insured plans (with 168 plans with 10,000 or more participants).<span style="mso-spacerun: yes;"> </span>They expect plan insolvencies to increase from 46 plans to 90 plans within the next five years.<span style="mso-spacerun: yes;"> </span>Two plans became insolvent in 2011; five plans closed out with annuities in 2012.<o:p></o:p></span></span></div>
Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-62369089750108359682013-01-17T09:52:00.000-08:002013-01-23T08:28:13.874-08:00Fiduciary Insurance Coverage for Plan Amendments and Other Non-Fiduciary Functions <div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black; font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">Two recent cases underscore a recurring fiduciary liability insurance gap for trustees of multiemployer benefit plans:<span style="mso-spacerun: yes;"> </span>they perform many functions in their capacities as trustees that, like plan amendments, are normally handled by a plan sponsor.<span style="mso-spacerun: yes;"> </span>But these settlor functions may not be covered under standard fiduciary policies.<span style="mso-spacerun: yes;"> </span>Indeed, the standard fiduciary liability insurance policy only covers fiduciary actions.<span style="mso-spacerun: yes;"> </span>Trustees thus need insurance coverage for more than just claims relating to fiduciary activities.</span><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
<span style="color: black;"></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"></span></b><br />
<span style="color: black;"><a name='more'></a></span><div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;">Amending a Plan is not a Fiduciary Function<o:p></o:p></span></div>
<span style="color: black;"></span><br />
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">An August 27, 2012 decision from the Second Circuit Court of Appeals in <i>Janese<span style="mso-spacerun: yes;"> </span>v. Fay</i><i style="mso-bidi-font-style: normal;">, </i>Case 11-5369-cv (2nd Cir. Aug. 27, 2012), addressed the question of whether trustees of multiemployer plans act as fiduciaries when they amend a pension plan.<span style="mso-spacerun: yes;"> </span>The case was a derivative action of present and former beneficiaries of the former Niagara-Genesee & Vicinity Carpenters Local 280 Pension and Welfare Funds alleging that current and former trustees had improperly depleted plan assets through a series of plan amendments.<span style="mso-spacerun: yes;"> </span>The trustees defended the action by arguing that they have no liability under ERISA because amending a plan is not a fiduciary function.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">While it has been resolved for years under Supreme Court precedent that amending a single employer plan is not a fiduciary function, courts have reached conflicting conclusions with respect to multiemployer plans.<span style="mso-spacerun: yes;"> </span>Indeed, prior to the decision, the Second Circuit had a split of opinion as to whether plan amendments in multiemployer plans are fiduciary functions.<span style="mso-spacerun: yes;"> </span>For example, in <i style="mso-bidi-font-style: normal;">Chambless v. Masters</i>, 772 F. 2d 1032 (2d Cir. 1985) and <i style="mso-bidi-font-style: normal;">Siskind v. Sperry</i>, 47 F.3d 498 (2d Cir. 1995), the Second Circuit held that trustees of multiemployer pension plans act as fiduciaries when they amend a plan.<span style="mso-spacerun: yes;"> </span>The court reasoned that multiemployer plans were different than single employers plans, because “[i]n the multi-employer setting, trustees amending a pension plan ‘affect the allocation of finite plan asset pool’ to which each participating employer has contributed.”<span style="mso-spacerun: yes;"> </span>But more recent decisions in the Circuit, relying on Supreme Court decisions in <i style="mso-bidi-font-style: normal;">Curtiss-Wright Corp. v. Schoonejongen</i>, 514 U.S. 73 (1995), <i style="mso-bidi-font-style: normal;">Lockheed Corp v. Spink</i>, 517 U.S. 882 (1996), and <i style="mso-bidi-font-style: normal;">Hughes Aircraft Co. v. Jacobson</i>, 525 U.S. 432 (1999), had ruled to the contrary that multiemployer plans are no different than single employer plans with respect to plan amendments.<span style="mso-spacerun: yes;"> </span>These cases reasoned that plan sponsors who alter plans do not fall into the category of fiduciaries, because employers or other plan sponsors are free under ERISA for any reason and at any time to adopt, modify or terminate benefit plans.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black; font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">After reviewing cases from three other federal circuits and courts within its own circuit, the Second Circuit joined the weight of authority holding that amending a multiemployer plan is not a fiduciary function.<span style="mso-spacerun: yes;"> </span>The decision effectively eliminates any distinction between single and multiemployer plans concerning plan amendments.</span><b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><br /><br /><span style="color: black;">No Coverage for Settlor Functions under a Fiduciary Liability Policy<o:p></o:p></span></span></b></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Earlier this year, the Court of Appeals in New York (New York’s highest court) held that a fiduciary liability insurance policy does not cover actions undertaken in a settlor capacity of an employee benefit plan.<span style="mso-spacerun: yes;"> </span><i style="mso-bidi-font-style: normal;">See</i> <i style="mso-bidi-font-style: normal;">Federal Insurance Co. v. International Business Machines Corp.</i>, 965 N.E.2d 934 (N.Y. 2012).<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">In the underlying action, beneficiaries of the International Business Machines Corporation Personal Pension Plan (“IBM” or “IBM Plan”) filed a class action alleging that IBM had violated the age discrimination provisions of ERISA when it amended its pension plan.<span style="mso-spacerun: yes;"> </span>Although the complaint alleged violations of ERISA, it did not allege that IBM had breached any fiduciary duties.<span style="mso-spacerun: yes;"> </span>Indeed, the record was undisputed that IBM was acting not as a fiduciary, but in a settlor capacity in amending the plan benefits.<span style="mso-spacerun: yes;"> </span>The only question was whether a settlor function was covered under the fiduciary liability insurance program issued to IBM.<span style="mso-spacerun: yes;"> </span>After protracted litigation in federal courts, including a denial of certiorari by the U.S. Supreme Court, the parties reached a settlement that exceeded $300 million, including over $88 million in attorneys’ fees and costs to plaintiffs’ counsel.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Federal Insurance Company (“Chubb”) subsequently filed an insurance coverage action seeking a declaration that it had no duty to indemnify the IBM Plan under its fiduciary liability excess policy (the underlying $25 million Zurich policy had been exhausted).<span style="mso-spacerun: yes;"> </span>As a following form excess policy, the Chubb Policy specified coverage for “wrongful acts,” defined in relevant part as “any breach of the responsibilities, obligations or duties by an Insured which are imposed upon a fiduciary of a Benefit Program by ERISA, or by the common or statutory law of the United States, or ERISA equivalent laws in any jurisdiction anywhere in the world.”<span style="mso-spacerun: yes;"> </span>IBM argued that it qualified for coverage because it was a plan fiduciary and was accused of violating ERISA, regardless of whether the underlying claims were based on acts undertaken in a settlor rather than a fiduciary capacity.<span style="mso-spacerun: yes;"> </span>In other words, IBM argued that there was no requirement that it must as an insured have been acting in its capacity as an ERISA fiduciary in order for an act to be considered a “wrongful act” under the policy.<span style="mso-spacerun: yes;"> </span>Chubb argued that the term “fiduciary” limited coverage to cases in which the alleged wrongful acts an insured engaged in were alleged to be in breach of ERISA’s fiduciary duties.<span style="mso-spacerun: yes;"> </span>Chubb therefore disclaimed coverage because IBM was sued for amending a plan, which is a non-fiduciary settlor function.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">The trial court held that IBM was entitled to coverage under the policy because the plaintiffs’ lawsuit alleged breaches of fiduciary duty.<span style="mso-spacerun: yes;"> </span>The intermediate appellate court reversed and ruled for Chubb.<span style="mso-spacerun: yes;"> </span>The New York Court of Appeals affirmed the decision in favor of Chubb, holding that the policy “constitutes a clear expression of the parameters of coverage, easily understandable to the average insured.”<span style="mso-spacerun: yes;"> </span>Specifically, the policy’s definition of “wrongful act” limits coverage to acts of an insured undertaken in its capacity as an ERISA fiduciary.<span style="mso-spacerun: yes;"> </span>The policy does not cover every violation of ERISA as IBM argued; only violations that involve fiduciary responsibilities under the law.<span style="mso-spacerun: yes;"> </span>Since IBM was sued in the underlying action as a plan sponsor and settlor of the plan, it was not acting as a fiduciary under ERISA.<span style="mso-spacerun: yes;"> </span>Consequently, Chubb had no duty to indemnify IBM for settlement of the class action.<span style="mso-spacerun: yes;"> </span></span><b style="mso-bidi-font-weight: normal;"><u><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><o:p></o:p></span></u></b></span></div>
<div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: #bfbfbf 1pt solid; margin-left: 13.5pt; margin-right: 0in; mso-border-top-alt: solid #BFBFBF .5pt; mso-border-top-themecolor: background1; mso-border-top-themeshade: 191; mso-element: para-border-div; padding-bottom: 0in; padding-left: 0in; padding-right: 0in; padding-top: 1pt;">
<div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; line-height: 115%; margin: 0in 0in 10pt; mso-border-top-alt: solid #BFBFBF .5pt; mso-border-top-themecolor: background1; mso-border-top-themeshade: 191; mso-padding-alt: 1.0pt 0in 0in 0in; padding-bottom: 0in; padding-left: 0in; padding-right: 0in; padding-top: 0in; tab-stops: 9.0pt;">
<span style="color: black;"><br /></span></div>
</div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; line-height: 115%; mso-font-kerning: 10.0pt; mso-themecolor: accent3; mso-themeshade: 191;">The Euclid Perspective</span></i></b><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">The <i style="mso-bidi-font-style: normal;">Federal v. IBM</i> decision reflects the basic proposition that standard fiduciary liability insurance policies are primarily designed to protect against individual liability.<span style="mso-spacerun: yes;"> </span>Nevertheless, this causes misunderstandings when policyholders often believe that their fiduciary liability policy should cover any violation of ERISA, as IBM argued here.<span style="mso-spacerun: yes;"> </span>Typical fiduciary liability insurance policies do not cover settlor functions, such as establishing or terminating a plan, choosing the plan design and plan features, and amending the plan, including changes in benefits.<span style="mso-spacerun: yes;"> </span>Three considerations are noteworthy.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">First, the coverage gap for settlor claims is largely limited to payment of defense costs because the damages recoverable in pure settlor cases are likely to involve a core claim for benefits that would have been due but for the allegedly improper conduct.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Second, the coverage gap should be rare, because most claims involving plan amendments involve both settlor and fiduciary functions, and thus the policy would provide a duty to defend the action to the extent a covered claim is alleged.<span style="mso-spacerun: yes;"> </span>For example, most objections to a plan amendment, such as a violation of ERISA’s anti-cutback or anti-discrimination rules (settlor functions), usually also allege a disclosure violation relating to the plan amendment (fiduciary or covered administrative functions).<span style="mso-spacerun: yes;"> </span>But on the occasions like the IBM case in which only settlor functions are challenged, the decision serves as a reminder of the potential coverage gap.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Third, and more importantly, this coverage gap is more problematic for multiemployer plans.<span style="mso-spacerun: yes;"> </span>The August <i style="mso-bidi-font-style: normal;">Janese</i> decision demonstrates the prevailing trend that, with respect to plan amendments, multiemployer plans are being treated like single employer plans.<span style="mso-spacerun: yes;"> </span>For single employer plans like the IBM pension plan, the company can pay the costs, although potentially significant, of defending and settling the claim.<span style="mso-spacerun: yes;"> </span>But paying the litigation expenses in a settlor claim involving a multiemployer plan is more challenging.<span style="mso-spacerun: yes;"> </span>No individual employer exists that is able or likely willing to pay the claim that is not covered by standard fiduciary insurance policies.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10.5pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">The solution is to seek defense coverage for settlor functions in a plan’s fiduciary liability insurance policy.<span style="mso-spacerun: yes;"> </span>In an evolving trend, several insurance carriers committed to the multiemployer market now expand their definition of “wrongful act” in fiduciary liability policies issued to multiemployer plans to provide defense costs for claims in which a trustee is sued in the capacity as a trustee (as opposed to their capacity as a fiduciary).<span style="mso-spacerun: yes;"> </span>The policy issued by Euclid Specialty Managers expands coverage in the policy form to “any negligent act, error or omission by an Insured solely in such Insured’s capacity as a trustee of a Plan.”<span style="mso-spacerun: yes;"> </span>This expansion of coverage provides a defense to a purely settlor claim and avoids the coverage gap presented in the recent IBM coverage action for multiemployer plans.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-47464132579903400552013-01-17T09:50:00.000-08:002013-01-23T08:28:34.909-08:00Ensuring Continuity of Professional Liability Policies<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Professional liability insurance programs are complex contracts that must be managed with the expertise of an experienced broker.<span style="mso-spacerun: yes;"> </span>This is particularly true whenever a policyholder is considering switching carriers.<span style="mso-spacerun: yes;"> </span>Policyholders may want to switch for a lower price, or to move to another carrier for affinity or other preferences.<span style="mso-spacerun: yes;"> </span>But switching carriers without ensuring full continuity of coverage creates the risk that claims alleging negligence in prior years will not be covered.<span style="mso-spacerun: yes;"> </span>Indeed, the risk of a claim increases every year an entity is in business, so coverage must be in place today for any negligence, error or omission which took place before the current policy period. <o:p></o:p></span></span></div>
<span style="color: black;"></span><span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"></span><br />
<span style="color: black;"><a name='more'></a></span><div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;">Before switching professional liability carriers, policyholders must look to preserve the chain of continuity.<span style="mso-spacerun: yes;"> </span>The primary objective of continuity is to see that the original coverage is maintained, without gaps, as insurance is renewed from year to year.<span style="mso-spacerun: yes;"> </span>Continuity concerns arise because most professional liability insurance policies are written on a claims-made basis.<span style="mso-spacerun: yes;"> </span>This means the insurance company pays only for claims first made against the insured during the policy period – even if the alleged wrongdoing occurred prior to the policy period.<span style="mso-spacerun: yes;"> </span>The timing of professional liability claims is different from liability claims for a home or car.<span style="mso-spacerun: yes;"> </span>The latter are triggered by the date a loss or injury occurs, such as the day of an accident or weather event.<span style="mso-spacerun: yes;"> </span>With professional liability coverage however, the policy that provides coverage is the one in force when a claim is made – not the policy in force when it is claimed a wrongdoing occurred. <o:p></o:p></span></div>
<span style="color: black;"></span><br />
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Because a professional can be sued today for conduct that took place in prior years, the key coverage question is whether your claims-made policy will cover that prior conduct.<span style="mso-spacerun: yes;"> </span>That is why continuity of coverage is critical.<span style="mso-spacerun: yes;"> </span>Three matters must be addressed when trying to ensure continuity: (1) the warranty on the initial application; (2) the policy’s pending or prior litigation exclusion date; and (3) the prior-acts exclusion and retroactive date.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><span style="color: black;">The Warranty Statement<o:p></o:p></span></span></b></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">The chain of continuity begins when coverage is written for an insured.<span style="mso-spacerun: yes;"> </span>When a D&O, EPL or other professional liability policy is initially written, the insured typically completes a long-form application, which includes warranty questions.<span style="mso-spacerun: yes;"> </span>A warranty question asks a prospective insured to disclose any exposure to potential liability.<span style="mso-spacerun: yes;"> </span>A common warranty question asks:<span style="mso-spacerun: yes;"> </span>“Is any person or entity proposed for this insurance aware of any fact, circumstance or situation which may result in a claim against the organization or any of its directors, officers or employees?”<span style="mso-spacerun: yes;"> </span>Once an executive signs the application, it becomes part of the policy.<span style="mso-spacerun: yes;"> </span>The insurer materially relies on the warranties in the application to issue coverage.<span style="mso-spacerun: yes;"> </span>Any misrepresentation or failure to disclose material information in response to the warranty question can void coverage under the policy. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">When coverage is renewed with the incumbent insurer, the insured typically completes a “short form,” or renewal application.<span style="mso-spacerun: yes;"> </span>If for some reason a long form must be used for the renewal, the incumbent insurer often allows the insured to strike the warranty questions in the application.<span style="mso-spacerun: yes;"> </span>The reason policyholders should not answer warranty questions in successive years is that it could jeopardize coverage.<span style="mso-spacerun: yes;"> </span>For example, an insurer could contend that the insured failed to disclose knowledge that was acquired after the initial application in a subsequent set of warranty statements.<span style="mso-spacerun: yes;"> </span>If a new long-form application with warranty questions is required by the new insurer, then continuity is broken. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><br /><span style="color: black;">Retroactive Date for Prior Acts<o:p></o:p></span></span></b></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">Contrary to common perceptions, professional liability policies provide full prior-acts coverage for wrongful acts as defined in the policy, including employment-related acts if part of the wrongful act definition, as long as the insured had no knowledge of them.<span style="mso-spacerun: yes;"> </span>Many underwriters, however, restrict this coverage with prior- acts exclusion on new business and accompanying “retroactive dates” by endorsement or the declarations page of the policy.<span style="mso-spacerun: yes;"> </span>For EPLI policies, the exclusion most often is added when the policyholder has not had prior coverage.<span style="mso-spacerun: yes;"> </span>The reason for prior act restrictions is that the insurer does not have experience or a track record with the account.<span style="mso-spacerun: yes;"> </span>A professional liability policy, however, with a prior acts exclusion has very little value, because the risk of a claim predominately relates to activities in the past.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">If the previous policy provided full prior-acts coverage, and the new policy has prior-acts exclusion, with the retroactive dates set at the new policy’s inception date, continuity is broken.<span style="mso-spacerun: yes;"> </span>Of course, if the new insurer uses the same retroactive date as the previous policy, then continuity remains intact.<span style="mso-spacerun: yes;"> </span>Sometimes a new insurance company will provide full prior-acts coverage by not using prior-acts exclusion.<span style="mso-spacerun: yes;"> </span>In those cases, however, the carrier likely will require a new long-form application to be completed with warranty questions, which also breaks continuity.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;"><span style="color: black;">Pending or Prior Litigation Date<o:p></o:p></span></span></b></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">In addition to considerations of coverage for prior acts, a coverage gap can be created with the pending or prior litigation exclusion that is common to most professional liability policies.<span style="mso-spacerun: yes;"> </span>The purpose of the pending and prior litigation exclusion date is to ensure that a new insurer does not have to pay a claim arising from active or pending litigation that an insured knew about before the effective date of the new coverage.<span style="mso-spacerun: yes;"> </span>A typical pending or prior litigation exclusion bars coverage for “any prior or pending litigation that is known, including any facts, incidents or circumstances the insured had knowledge of with respect to any ‘claims’ or ‘wrongful acts,’ including administrative or regulatory proceedings, prior to the time the policy was written and/or of which any notices were given to any prior insurers.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">The highest risk of a gap in coverage is when a policyholder does not disclose a circumstance that the carrier considers a claim, but the insured does not.<span style="mso-spacerun: yes;"> </span>The most common examples are matters involving the Equal Employment Opportunity Commission (EEOC) or the Securities and Exchange Commission.<span style="mso-spacerun: yes;"> </span>If a complaint is filed against an insured with the EEOC, the insured may not realize the insurer considers this a “claim.”<span style="mso-spacerun: yes;"> </span>The definition of “claim” varies among policies, but a claim may include non-monetary demands and usually includes administrative or regulatory proceedings, such as the EEOC.<span style="mso-spacerun: yes;"> </span>If the insured failed to report an EEOC complaint to the incumbent insurer, the carrier might not respond to a lawsuit that arises after its policy expires.<span style="mso-spacerun: yes;"> </span>Meanwhile, the new insurer could deem this to be “pending or prior litigation” and also deny coverage for any subsequent litigation.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;">If coverage renews with the incumbent insurer, continuity is maintained at the anniversary of the first renewal and thereafter, as long as coverage is maintained with the same insurer.<span style="mso-spacerun: yes;"> </span>But if the insured opts to renew with another insurer, continuity can jeopardized.<span style="mso-spacerun: yes;"> </span>The risk is that an insurer will later contend that the insured acquired knowledge but failed to disclose this later acquired knowledge when the insured signed a subsequent set of warranty statements.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black; font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">Ideally, to maintain coverage continuity, a new insurer should agree to use the inception date of the insured’s initial professional liability policy as the new policy’s pending or prior litigation exclusion date.<span style="mso-spacerun: yes;"> </span>In practice, however, the great majority of insurers use the date their policies take effect.<span style="mso-spacerun: yes;"> </span>A new insurer may agree to keep the expiring policy’s pending or prior litigation date, if the insured provides copies of all notices or claims given to previous insurers. <br /></span></div>
<div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: #bfbfbf 1pt solid; margin-left: 13.5pt; margin-right: 0in; mso-border-top-alt: solid #BFBFBF .5pt; mso-border-top-themecolor: background1; mso-border-top-themeshade: 191; mso-element: para-border-div; padding-bottom: 0in; padding-left: 0in; padding-right: 0in; padding-top: 1pt;">
<div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; line-height: 115%; margin: 0in 0in 10pt; mso-border-top-alt: solid #BFBFBF .5pt; mso-border-top-themecolor: background1; mso-border-top-themeshade: 191; mso-padding-alt: 1.0pt 0in 0in 0in; padding-bottom: 0in; padding-left: 0in; padding-right: 0in; padding-top: 0in; tab-stops: 9.0pt;">
<span style="color: black;"><br /></span></div>
</div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt; line-height: 115%; mso-font-kerning: 10.0pt; mso-themecolor: accent3; mso-themeshade: 191;">The Euclid Perspective</span></i></b><b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span style="font-family: 'Arial','sans-serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman'; mso-themecolor: accent3; mso-themeshade: 191;">:<span style="mso-spacerun: yes;"> </span>Our Continuity Commitment <o:p></o:p></span></i></b></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt 13.5pt; tab-stops: 9.0pt;">
<span style="color: black; font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">The easiest way to maintain the critical chain of continuity is to renew with the incumbent carrier.<span style="mso-spacerun: yes;"> </span>Before considering switching insurance carriers in a claims-made policy, a policyholder should hire an experienced broker to protect against a loss of continuity.<span style="mso-spacerun: yes;"> </span>Euclid is committed to ensuring that our current policyholders maintain full continuity of coverage.<span style="mso-spacerun: yes;"> </span>Our </span><a href="http://www.euclidmanagers.com/pgprofliab/esm.html"><span style="color: black; font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">renewal applications</span></a><span style="font-family: 'Georgia','serif'; font-size: 10pt; letter-spacing: -0.25pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><span style="color: black;"> for fiduciary and labor professional liability coverage do not contain a warranty statement. <br /><br />When we are quoting for new professional liability business, we understand how to preserve the critical chain of continuity:<span style="mso-spacerun: yes;"> </span>if an account meets appropriate underwriting criteria, we do not require warranty statements, we can quote off of the incumbent carrier renewal applications, and we will consider backdating the retroactive and pending and prior litigation dates to ensure full continuity of coverage.<span style="mso-spacerun: yes;"> </span><br /><br />Our producer partners have our commitment that we will work with you in the new and renewal underwriting process to ensure your clients maintain continuity of coverage that will not create an unnecessary gap in coverage.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.comtag:blogger.com,1999:blog-635040300303117318.post-88508340286889784192013-01-17T09:44:00.000-08:002013-01-23T08:51:17.966-08:00The DOL’s New Guidance on JATC Plan Expenses – The Modesty Policy <div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">In 2011, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) increased enforcement of apprenticeship and training plans. Dozens of open investigations have caused considerable confusion as to what expenses are appropriate in these plans, particularly as investigators have appeared to act capriciously with inconsistent standards across the country. The key question is whether plan assets can be used for payments (1) for meals, gifts, entertainment, or other expenses associated with graduation ceremonies and (2) to market, advertise or promote the apprenticeship or training program. On April 2, 2012, the DOL issued the first Field Assistance Bulletin of the year (</span><a href="http://www.dol.gov/ebsa/regs/fab2012-1.html"><span style="color: black; font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">FAB No. 2012-01</span></a><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">) to provide guidance and promote consistency among EBSA regional offices in their enforcement issues. The DOL defines a policy of permitting only “modest” expenses that can be justified under the educational purpose of the plan.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;"><a name='more'></a>
The Bulletin begins by underscoring that apprenticeship and training programs that qualify as employee welfare benefit plans are covered by ERISA. Accordingly, even though these programs have unique structure and operations, the plan fiduciaries are still subject to and must abide by the fiduciary standards in ERISA. The key fiduciary responsibility relevant to plan expenses is the “exclusive purpose” rule: trustees and other plan fiduciaries must discharge their duties solely in the interests of plan’s participants and beneficiaries, and for the exclusive purpose of providing apprenticeship or training benefits to participants and defraying reasonable expenses of administering the plan. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<b><u><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">No Bright Line Rule</span></u></b><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">Next, the DOL does not declare that graduation or advertising expenses are “per se” or categorically impermissible under ERISA. Instead, the DOL instructs EBSA investigators to review expenses “on a case-by-case basis” under ERISA’s exclusive purpose rule, recognizing the unique characteristics of apprenticeship and training plans. The test is whether plan fiduciaries have ensured the reasonableness of plan expenses in light of the educational objectives of the apprenticeship or training program. The DOL places the burden on plan fiduciaries “to justify plan expenses as appropriate means of carrying out the plan’s mission of training workers.” Before incurring any plan expenditure, plan trustees must reasonably determine that the expenditures are likely to promote legitimate plan objectives. Under the guidance in the Bulletin, plan fiduciaries must be able to prove that plan expenditures constituted a “necessary service” or were otherwise “appropriate and helpful” in carrying out training purposes. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<b><u><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">“Modest” Graduation Ceremonies: Dinners are Out/Light Refreshments Acceptable<o:p></o:p></span></u></b></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">The DOL does not forbid expenses for graduation ceremonies paid by a plan, because the ceremonies can serve legitimate purposes. The Bulletin states that a graduation ceremony designed to congratulate graduates on their achievements and encourage them on their future endeavors “may support” the training objectives of the plan by establishing an incentive and goal for participants to successfully complete the program. But the guidance provides <b>three limiting factors</b>. <b><u>First</u></b>, the ceremony must be “modest,” meaning that any expense must reasonably relate to the plan’s assets. <b><u>Second</u></b>, the expense must be approved in accordance with plan controls designed to prevent inappropriate expenditures. <b><u>Third</u></b>, the expenses must be restricted to the costs of the ceremony – even a graduation dinner will be considered improper. The Bulletin makes clear that EBSA will generally find impermissible as plan expenses any dinner for all graduation attendees, valet parking, or travel and/or hotel accommodations for graduating apprentices or guests. By contrast, the DOL states that a “modest graduation ceremony” offering light refreshments with diplomas or certificates for apprentices and “token” awards/gifts for plan instructors would be permissible. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<b><u><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">Advertising Expenses: T-shirts Acceptable/Sporting Events and Charitable Donations Out</span></u></b><span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<span style="font-family: 'Georgia','serif'; font-size: 10pt; line-height: 115%;">The Bulletin states that certain outreach expenses related to the program can be paid for by the apprenticeship and training plans consistent with ERISA’s fiduciary requirements, as long as the expenses are for marketing or promotion of the program and not for industry advancement or for the benefit of sponsoring employers or the union. The DOL suggests that t-shirts with logos and modest meals provided by the plan for attendees at instruction programs may be appropriate expenses, but tickets to sporting events or charitable donations would not be permissible. The Bulletin describes that “[i]n every instance, the fiduciary must thoughtfully ensure that the plan’s assets are being efficiently used to promote the plan’s training mission.”<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 115%; margin: 0in 0in 10pt;">
<b><u><span style="color: black; font-family: 'Georgia','serif';">The Euclid Perspective</span></u></b><b><span style="font-family: 'Georgia','serif';"><o:p></o:p></span></b></div>
<span style="color: black;"><span style="font-family: 'Georgia','serif'; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">The DOL continues to place the burden on trustees to manage plan expenses and has not issued a safe harbor to avoid potential liability. The DOL’s new modesty policy reveals its skepticism of many expenses that apprenticeship and training programs have routinely incurred. Consequently, many plans will have to make changes to avoid potential personal liability for its fiduciaries. Specifically, the DOL defines “modest” graduation ceremony very narrowly, even forbidding graduation dinners. The best advice the DOL provides is that every apprenticeship and training plan must establish and follow written expense policies and internal controls. The DOL is signaling that expenditures will be much easier to defend if they are part of a written expense policy subject to internal controls. Plan fiduciaries must be prepared to demonstrate that they thoughtfully ensured plans assets were efficiently used to promote the plans’ training mission. The only way for trustees to gain comfort is to proactively assess and analyze all expenses before they happen. And as always, given the inherent uncertainties in potential liability and enforcement by the DOL, the only real comfort is to ensure that your plan has adequate </span><span style="font-family: 'Calibri','sans-serif'; font-size: 11pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"><a href="http://www.euclidmanagers.com/pgprofliab/esm.html"><span style="font-family: 'Georgia','serif'; font-size: 10pt;">fiduciary liability coverage</span></a></span><span style="font-family: 'Georgia','serif'; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"> in the event of a challenge to your plan’s operations. </span></span>Euclid Specialtyhttp://www.blogger.com/profile/18046118804366796878noreply@blogger.com