Friday, August 31, 2018

Local Gas Stations and Electric Cars

Local Electric Charging Stations

My wife and I recently bought a Chevrolet Bolt. Our first electric car.

We bought the Bolt because it has great range - 250 miles on a full charge - and because it is priced in the range of most cars. After the Federal tax credit it cost us less than $30,000.

Before owning this car I was of a mind that local charging stations would start popping up the way local gas stations have. After all I see them in all the public parking decks in town. I was told by the car salesman that the Sheets gas stations are all putting in charging stations.

I even downloaded the ChargePoint and EVGo apps to be able to find charging stations.

After owning the car for a month I have radically changed my thinking.

Local EV Charging Stations Will Never be Like Gas Stations

We drive the Bolt 25 to 75 miles a day. We plug it in at home and get a full charge each night.

We will never have a need for a local charging station the way we do for a local gas station.

With our old timey internal combustion engine cars we buy gas only from gas stations. We do not have the option of filling up at home. I know farmers and a few others have their own gas pumps, but most people do not.

Everyone can "fill up" their electric vehicle at home because everyone has electricity at home.

Change Happens Over Time, But It Still Happens

I know I am an early adopter. I know the move away from most cars being gas powered cars is a decade or more away. But that change is coming.

The future is always farther than the past. However, the future is where we are going.

What will be the downstream effects of people not needing to go to the local gas station to buy gas?

What do you think?

Thursday, August 23, 2018

Bank Loans and Car Warranty Premiums

How Does the Insured Get the Cancellation Refund

I was standing in line at the bank this week when I overheard a customer asking the teller when the bank was going to give her the refund on her Car Warranty she purchased when she recently bought a new car.

Here is what she had done:

  1. Bought a new car
  2. Bought the new car warranty coverage from the dealership
  3. Paid for the car and the warranty with the loan from the bank
  4. Cancelled the warranty coverage
  5. Asked the car dealer who sold her the warranty coverage for the refund
  6. Car dealer told her she would have to get the refund from the bank since they had the loan

Where did the refund money from the warranty company go?

If the bank had been a premium finance company, the insurance / warranty company would have a record of that and would have sent the refund back through the premium finance company.

But the bank is not a premium finance company. That raises the question...

"Should a bank loan money to pay for a warranty policy - essentially an insurance policy?"

Is the insured just trying to scam the bank loan?

The loan customer supposedly borrowed say $20,000 for the car and $3,000 for the warranty. The loan customer is now trying to get part of that loan back as cash.

Presumably the loan amount is not reduced by the cancellation of the warranty policy. If the loan customer had cancelled the purchase of the car - meaning sold the car - the loan would have to be settled.

Seems kinda tricky to me.

Do you know the answer?

I do not, but I am interested. Please leave a comment to explain.


Monday, August 13, 2018

Does Insurance Agent or Broker Relationship Control in Nevada

Which Relationship Controls in Nevada

In Nevada it is possible for a licensed insurance agent to act as a broker. Nevada rules allow a broker to charge fees under a written agreement for consultation services. Agents are not allowed to charge fees. This means it is important to understand which set of rules apply.

Agent Relationship Controls Broker

"6. A producer who is acting as an agent may also act as and be a broker with regard to insurers for which he or she is not acting as an agent. The sole relationship between an insurer and a broker who is appointed as an agent by the insurer as to any transactions arising during the period in which the broker is appointed as an agent is that of insurer and agent, and not insurer and broker."

Generally speaking the ability to charge fees in Nevada is addressed under the Illegal Dealing in Premiums law. Find that law here...

This is a common area of insurance law where additional fees are addressed in many states.

Here is an outside legal opinion published on this issue...

Tuesday, August 7, 2018

Virginia Insurance Agents and Fiduciary Accounts

Premium Trust Accounts for Virginia Insurance Agencies

Virginia does not require a Premium Trust Account for insurance agents, instead Virginia does require a fiduciary account separate from all other business and personal funds.

Here is a link to the law...

§ 38.2-1813. Reporting and accounting for premiums.

A. All premiums, return premiums, or other funds received in any manner by an agent or a surplus lines broker shall be held in a fiduciary capacity and shall be accounted for by such agent or surplus lines broker. 

The Big Exception

Section D of this same link shows the one exception...

"D. This section shall not require any agent who is a duly appointed agent of an insurer and who has a written contractual relationship with such insurer which includes provisions regarding remittance of funds to maintain a separate fiduciary account for the funds. Such funds shall be held separately from any personal or nonbusiness funds and shall be reasonably ascertainable from the books of accounts and records of the agent."

You still need to funds kept in a separate account, but it does not have to be a "fiduciary account".

Monday, August 6, 2018

Insurance Agency Fees in Michigan

What Fees Can Insurance Agents Charge in Michigan

Insurance producers are not allowed to charge or pass a service fee to consumers for insurance policies sold in the admitted market.

Michigan is a non-broker state; therefore, insurance producers act as agents on behalf of their insurance companies instead of their clients.

The only exception applies to licensed surplus lines producers who may charge a fee not exceeding the statutory limit for surplus lines policies only.

Here is the link to a document on the Michigan rules...

Friday, August 3, 2018

Can an Illinois Insurance Agent Pay Card Transaction Costs from their PFTA

Illinois and Insurance Premium Trust Accounts

In Illinois insurance premium payments accepted by the agent must be deposited into a PFTA - premium trust account.

Here is the link to the relevant law...

If the premium payment is accepted as a debit or credit card payment, is it legal for there to be a withdrawal from your agency PFTA account to pay the transaction cost of those premium payments?

Probably not. Read on....

Limitations of Withdrawals

Here are the things for which you are allowed to withdraw funds from the PFTA.

"Withdrawals can be made for the following reasons:
h)         The following disbursements may be lawfully withdrawn from the PFTA:

1)         Net or gross premium remittances due other licensees or insurers. Claims payments or reinsurance premiums when offset at the direction of the insurer may be transferred to another account;

2)         Return premiums due insureds;

3)         Commissions due the licensee, net of any financial institution fees or service charges, or commissions due another licensee only when the commission withdrawal is matched and identified with premiums previously deposited into the PFTA;

4)         Non-premium monies when matched and identified with prior non-premium PFTA deposits;

5)         Interest or other revenue which the licensee is authorized to retain.

6)         Withdrawals pursuant to subsections (h)(3), (4) and (5) must be made payable to the licensee or another licensee."

I look at this like a named peril insurance policy as opposed to an all-risk insurance policy. If the action is not specifically allowed, then the action is not allowed.

Under this list of reasons I see no permission to withdraw funds to pay the transaction cost to the bank for you credit and debit card payments.

What do you think?