Memorandum of Coverage What is an MOC? Why do you need it? What - - PDF document

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Memorandum of Coverage What is an MOC? Why do you need it? What - - PDF document

Nov 16, 2023 126 likes •258 views

9/11/2014 It Isnt Insurance Yet 2014 F ALL C ONFERENCE AND T RAINING S EMINAR September 16 19, 2014 presented by Robin Johnson, JD, CPCU Doug Alliston, JD 2014 FALL CONFERENCE 1 & TRAINING SEMINAR Memorandum of Coverage What is an

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2014 FALL CONFERENCE AND TRAINING SEMINAR

September 16‐19, 2014

presented by

Robin Johnson, JD, CPCU Doug Alliston, JD

It Isn’t Insurance Yet

2014 FALL CONFERENCE & TRAINING SEMINAR 2

Memorandum of Coverage

  • What is an MOC?
  • Why do you need it?
  • What are the critical components?
  • Approaches?
  • Questions?

2014 FALL CONFERENCE & TRAINING SEMINAR

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What is an MOC?

  • Defines the coverage provided
  • Defines who is afforded the coverage
  • Defines the period during which the

coverage is provided

  • Defines the conditions that trigger the

coverage

  • Defines the means to resolve disputes

regarding coverage

2014 FALL CONFERENCE & TRAINING SEMINAR 4

What is an MOC?

It is Not Insurance

  • Not a contract of adhesion
  • Part of a larger relationship
  • Covered Party or Member vs. Insured
  • Less scrutiny to the MOC form

2014 FALL CONFERENCE & TRAINING SEMINAR

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What is an MOC?

  • Insurance companies’ vast resources
  • Wording tested in court
  • Know where and why deviations exists

Not Insurance – Yet a Good Start

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What is an MOC?

Coverage to Excess

  • Excess Insurance
  • Gaps
  • Reinsurance
  • Exceptions to following

form

Excess Insurance GAP JPA Coverage R/I JPA Coverage

2014 FALL CONFERENCE & TRAINING SEMINAR

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Why an MOC?

  • Need to define coverage for Members
  • Members can manage risk
  • Know what coverage they have

and what they need

  • Pool can limit liability
  • Need to define coverage for Others
  • Additional Insured
  • Loss Payees
  • Reinsurance

2014 FALL CONFERENCE & TRAINING SEMINAR 8

What are the Critical Components?

Declarations Exclusions Insuring Clause Conditions Limits and Deductibles Definitions Who Is an Insured

2014 FALL CONFERENCE & TRAINING SEMINAR

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Critical Components

Declarations

  • Name of Covered Party
  • Coverage Period
  • Limits of Liability
  • Deductible or SIR
  • Forms attached at inception

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Critical Components

Coverage Clause

  • Promise
  • Generally broad coverage
  • All Risk
  • Damages
  • Limited to a dollar amount
  • Per Loss
  • Per Occurrence

2014 FALL CONFERENCE & TRAINING SEMINAR

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Critical Components

Coverage Clause, cont’d

  • During Policy Period
  • Act or Injury
  • Continuing or repetitive

conduct

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Critical Components

Coverage Clause, cont’d

  • Defense Coverage
  • Duty and Right or just a Right
  • Right to Associate
  • If Duty, until when

2014 FALL CONFERENCE & TRAINING SEMINAR

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Critical Components

Limits and Deductibles

  • Coinsurance clauses
  • Deductibles versus Self‐Insured

Retentions

  • Sublimits
  • Aggregates

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Critical Components

Who is Covered?

  • Member, employees, officials
  • Covered Party v. Covered Party
  • Additional Covered Party

2014 FALL CONFERENCE & TRAINING SEMINAR

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Critical Components

Exclusions

  • Reasons for Exclusion
  • Better covered elsewhere
  • Moral or Morale Risk
  • Catastrophic
  • Maintain affordability

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Critical Components

Exclusions, cont’d

  • Broad Insuring Clause – More Exclusions
  • Exceptions to Exclusions

2014 FALL CONFERENCE & TRAINING SEMINAR

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Critical Components

Conditions

  • Not Insurance
  • Claims Reporting
  • Duty to cooperate
  • Coverage Disputes –When and How
  • Other Coverage
  • Severability

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Critical Components

Definitions

  • Clear
  • Consistent with Excess or Reinsurance
  • Distinguish words with definitions from

those with the common meaning

2014 FALL CONFERENCE & TRAINING SEMINAR

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Approaches

  • Stand Alone MOC
  • Coverage driven by Members
  • Needed for reinsurance
  • Possible gaps with Excess
  • Use of unfamiliar terms
  • Possible breadth straining financial

condition

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Approaches

  • Following Form
  • Proven form –tested in court
  • Less consideration/scrutiny by

Members

  • Must use excess rather than

reinsurance

2014 FALL CONFERENCE & TRAINING SEMINAR

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CAJPA Accreditation

Requirements

  • Declarations
  • Definitions
  • Indemnity Agreement
  • Conditions
  • Exclusions

Note this can be met by reference to other agreements or laws, e.g. Labor Code (Mandatory)

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Conclusion

  • Delicate Balance between
  • Broad Coverage and
  • Solvency
  • Clear, concise and well vetted by the

Members

2014 FALL CONFERENCE & TRAINING SEMINAR

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Questions?

2014 FALL CONFERENCE & TRAINING SEMINAR