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Commercial surety in the US is a recipe for success if you understand the intricacies and complexities of the market. The product is booming as an alternative in lieu of traditional letters of credit (LOC) and there’s ripe fruit for the picking. “The US commercial surety market is experiencing growth that’s faster than the overall insurance market and faster than North American GDP growth. That’s largely due to increased use of the product as an attractive alternative to letters of credit (LOC) and more obliges accepting bonds in lieu of LOCs,” said David Hewitt, US Surety Practice Leader, Marsh. “In the past few years, there has been lots of concern around interest rates. Many of our clients were looking for alternatives to putting up an LOC,” Hewitt added. “This led to more discussions and education around the product, which has helped it grow in popularity.” Results in the US commercial surety market have been positive for about 10 years, with an average 20% loss ratio or lower, which has enticed new entrants into the niche market. Pricing has been consistently dropping for at least three years, and the overall market continues to expand despite declining rates. The US remains an attractive market for global players to enter. Globalization is an increasing trend within US-based surety portfolios. As more firms enter the US and sign contractual documentation, the need for the surety product continues to expand. “We’re also seeing a lot of increased demand for commercial surety bonds for deals between US companies. Large corporates are using the product more and more, and if they have a good experience with it, the uptake increases,” Hewitt told Insurance Business at RIMS 2018. “I think the product is a really good alternative for any company that uses LOCs today, to help manage some of their risk “The universe where LOCs are used is huge and the different types of obligations parties are required to meet are almost too many too count. Many who previously looked to manage their risk through an LOC are finding that surety bonds provide a really good alternative in lieu, which often comes at a cost advantage, leaving borrowing space available for other financial necessities.” https://www.insurancebusinessmag.com/us/news/breaking-news/commercial-surety-bonds-attractive-alternative-to-locs-99478.aspx

A bill that would allow companies to road-test self-driving vehicles in New Hampshire may be facing some speed bumps. House Bill 314 cleared the House on a voice vote earlier this year. Its prime sponsor, Rep. Steven Smith, R-Charlestown, said the measure is the result of three years of work by around 20 stakeholders here. But he said there’s been some last-minute, “aggressive” lobbying by the autonomous vehicle industry to try to weaken the language in his bill. It’s frustrating, said Smith, who chairs the House Transportation Committee. “All of a sudden, they’re peppering us with model legislation at the end of a three-year period in the last two weeks,” he said. “It’s not the way we do business with our partners.” Smith said lobbyists want to change the bill to allow not just testing but deployment of driverless cars. He’s not budging. “I am not going to write a deployment package for a car that doesn’t exist,” he said. “I hope that they test here, but ultimately, my first job is public safety and a responsible test framework.” The legislation would allow someone to apply to the Department of Safety for an “autonomous vehicle testing license.” The company would have to provide the dates and locations where testing would occur – and put up a $10 million insurance or surety bond. It would also have to share some safety data with the state. Test vehicles would have to be accompanied by escort vehicles, and the license could be revoked for violating the rules of the road. Matthew Mincieli is Northeast regional executive director for TechNet, which represents about 70 technology and “innovation” companies. Mincieli said New Hampshire is “very appealing” for road-testing driverless cars because of its varied terrain and road conditions. But he said some of the requirements in House Bill 314 are too onerous. For one thing, he said, the $10 million bond is higher than anywhere else. And he said other states don’t require companies to notify them where the testing will occur. “We prefer the state not have the option of saying yes or no to certain locations,” he said. And the requirement of an escort vehicle is “a major impediment to testing,” Mincieli said. “That to us seems an overly complicated requirement.” The escort vehicle provision is “not negotiable,” Smith said. “You need eyes on (it) while it’s being tested.” Mincieli also objected to the provision that the state could pull the testing license for a violation of road rules. “That’s pretty broad,” he said. “The punishment doesn’t fit the crime.” Smith said he cobbled together portions of legislation that has worked in other states to create a law he thinks will be good for New Hampshire. He purposely did not include any definitions, since the industry is changing so fast, he said. Smith worked for eight years as a test engineer for a tech company. “And the things that they’re asking for, none of their test engineers would ask for,” he said. His bill would require that any vehicle tested here be first tested under controlled conditions that simulate “real world conditions.” “That’s responsible, and it builds confidence,” Smith said. “If a company isn’t willing to do that and they come to us and say, ‘We drove it around our parking lot,’ no, you’re not going on a New Hampshire road.” The debate here comes after some self-driving vehicles have been involved in fatal crashes in other states. Last month, after one of Uber’s self-driving test vehicles struck and killed a pedestrian in Tempe, Ariz., the company voluntarily suspended all of its testing programs around the country. Mincieli said the program New Hampshire lawmakers are proposing is far stricter than those of other states. “What they’ll do is end up causing testing and deployment to roll out more slowly,” he said. “It will cause a few speed bumps unique to New Hampshire.” The Legislature has to pass something, Smith said, noting the federal Department of Transportation has issued guidance that states can’t outright ban driverless vehicles. But the DOT leaves it up to states to regulate their own roads. Meanwhile, he said, “The industry’s made it clear that they don’t believe that anything in our statutes prevents them from doing it here tomorrow. “If we do nothing, they can just come here and it’s their playground,” he said. Sen. Regina Birdsell, R-Hampstead, who chairs the Senate Transportation Committee, said she’s spoken with some representatives of carmakers about their concerns. Birdsell said lawmakers have no intention of banning driverless vehicles. But, she said, “I want to make sure we do this right.” She said she initially was skeptical about driverless cars but has changed her mind. “I understand that autonomous vehicles are coming, and I honestly think it’s a really excellent alternative for our disabled and our elderly populations,” she said. Indeed, Jeff Dickinson, Granite State Independent Living’s advocacy director, told the Senate Transportation Committee last month that autonomous vehicles would be “transformative” for the elderly and disabled, especially in rural areas of the state with no public transportation. Read More… http://www.unionleader.com/Self-driving-cars-face-a-NH-reality

The three leading global credit insurers Atradius, Coface and Euler Hermes currently benefit from a supportive economic environment that is limiting corporate insolvencies, according to Moody’s https://www.intelligentinsurer.com/news/credit-insurers-buoyed-by-economic-environment-15083

A South Abington Twp. insurance agent pleaded guilty to collecting insurance premiums from construction companies and never buying the insurance on their behalf. Timothy A. Hewitt, 41, billed six clients more than $200,000 for performance bond insurance without buying the insurance from Liberty Mutual, Lackawanna County Assistant District Attorney C.J. Rotteveel said Wednesday. Hewitt pleaded guilty Monday in Lackawanna County court to five counts of insurance fraud and one count of forgery, all third-degree felonies punishable by up to seven years in prison and a maximum fine of $15,000. Rotteveel, the prosecutor for the Northeastern Pennsylvania Insurance Fraud Task Force, said he plans to seek prison time for Hewitt and restitution for the payments that never covered the companies. The companies were Arc Electric of Hazleton; Hi-Tech Flooring and Designtech Interiors, both of Kingston; Diaz Forest Products and Diaz Stone and Pallet, both of Harford; and Diaz Manufacturing of Montrose. Fortunately, he said, the companies never had to make a claim against the phony bonds. http://citizensvoice.com/news/insurance-agent-enters-guilty-plea-1.2319384