P&C Minute Transcripts

Insurance Guide Risk and insurance insider P&C Minute Transcripts

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November 2022

Stolen Mail Leads to Check Fraud

While cybercrime has generated a lot of attention, a low-tech fraud trend has emerged in recent months – a surge in stolen checks that ultimately leads to check fraud losses for credit unions. Hi, I’m Kim Donaca, Casualty & Property Consultant, with another P&C Minute.

Mailboxes — both personal and blue USPS boxes — are increasingly becoming the scene of crime. And, after the mail theft has occurred, the criminals sift through mail to locate checks in which the payee and/or dollar amount can be altered and negotiated elsewhere. Alternately, the thieves manufacture fraudulent checks based on the members’ original checks.

While you might want to encourage your members to pay bills online, mail checks inside the post office lobby, and log into their accounts frequently to review transaction history; your credit union will also want to consider recourse.

Credit unions may be able to recover losses from members’ issued checks that are stolen, altered, and negotiated elsewhere by pursuing a breach of presentment warranty claim against the financial institutions that accept them. According to Section 4-208 of the model Uniform Commercial Code, when a financial institution accepts a check for deposit or payment, it makes certain warranties to the credit union in which the check is drawn.

One of these warranties is that the check has not been altered. So, when a financial institution accepts a member’s check that has been altered, it is generally liable for the loss.

If your credit union has incurred such losses from members’ issued checks that are stolen and altered, or you simply want to learn more about check fraud and how to pursue a breach of presentment warranty claim, you can contact a CUNA Mutual Group Risk Consultant for guidance. You can reach them by sending an email to riskconsultant@cunamutual.com. Or call us at 800.637.2676, select you’re a credit union, then choose option 4.

CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Insurance products offered to financial institutions and their affiliates are underwritten by CUMIS Insurance Society, Inc. or CUMIS Specialty Insurance Company, members of the CUNA Mutual Group. Some coverages may not be available in all states. If a coverage is not available from one of our member companies, CUNA Mutual Insurance Agency, Inc., our insurance producer affiliate, may assist us in placing coverage with other insurance carriers in order to serve our customers' needs. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market
CUP-3360903.10-0922-1024 © CUNA Mutual Group

September 2022

Learn More About CUNA Mutual Group’s Panel Counsel

Successfully defending and litigating complex claims for our insureds requires significant experience and background in commercial general liability, employment practices, and lender liability among others. That’s why CUNA Mutual Group’s panel counsel is hand selected and among the most experienced insurance defense counsel in the credit union industry.

Hi, I’m property & casualty consultant, Susan Thompson, with another P&C Minute.

Generally, CUNA Mutual Group has the right and duty to provide our insureds throughout the country with a defense. We take that responsibility seriously throughout the life of all litigated matters. Membership on the CUNA Mutual Group panel counsel is not automatic and occurs only after extensive vetting performed by our litigation management team.

You can rest assured that part of that vetting includes ensuring counsel understands the credit union community and its purpose. This also includes ensuring selected counsel are up to date on the trends and exposures faced by our insured credit unions. The panel counsel list evolves on a regular basis with law firms and attorneys brought on or removed from the panel based on the experience they provide and the results they’ve obtained.

Our litigation philosophy is that we hire the attorney — and not the firm — looking to always ensure that we will not be outlawyered by the plaintiff bar.

Of course, communication is key! The panel counsel is responsible for reaching out to their client and you as the insured credit union immediately upon their assignment. The goal…to keep both of us abreast of what to expect throughout the course of litigation and the life of your claim. At any time, you feel you’d like additional communication, you have an immediate, direct connection to your claim handler.

And, to streamline processes for you, timely submission of invoices occurs through an advanced online billing technology allowing our staff to carefully review without you having to sort through them.

Being named as panel counsel is not easy — especially when it means litigating for CUNA Mutual Group’s credit union insureds. We are proud of the results of our panel counsel and appreciate the many successes they’ve assisted credit unions with.

If you’d like more information, contact your CUNA Mutual Group sales team.

July 2022

Insure to Value

Supply chain disruption has contributed to a rapid growth of inflation that has affected all walks of life, with shortages reported of such everyday items as computer chips, bathroom tissue, infant formula and various types of food products, among many others.

Hi, I’m Property and Casualty consultant, Kevin Roddick, with another P&C Minute.

Over the past two years, environmental and economic factors have driven surges because of a few factors, including: a broken supply chain impacting the cost of construction materials like lumber and steel, labor shortages in the construction and transportation sectors, and high inflation.

Shortages and delays have also affected credit unions, especially as they renovate existing buildings or build new ones. In fact, overall commercial building costs have risen over 20% in the last year.

Another significant issue is the undervaluation of the costs to replace a damaged building and equipment. The key for credit unions is to insure buildings to replacement cost value, so that there is adequate insurance available to replace each building when a loss occurs. An important step in evaluating risk is having the right values; however, the challenge is that valuations are a just a “snapshot at a point of time,” so you must be diligent in making certain that those limits are regularly reviewed.

Policyholders with Property & Business Liability coverage underwritten by CUMIS Insurance Society, Inc., can get some help in determining proper limits. Through an Insure-To-Value software program complete with CUNA Mutual Group and Marshall & Swift insights, data is updated monthly by zip code. This data is attributed to credit union locations and shared with you on an annual basis.

As you review your property locations listed on the Property & Business Liability policy, carefully compare current limits and suggested amounts from the Insure-to-Value Analysis. This can help ensure you have adequate limits and minimize the chance that you’ll get stuck with paying uncovered losses.

As always, your CUNA Mutual sales team is available to answer questions and provide guidance as you go through the process.

May 2022

Emerging Risks Outlook

When risk management is effective, typically nothing bad happens. But, if you’re blindsided by a problem, your credit union reputation usually takes the hit. Don’t let not knowing which emerging risks are around the corner in order to take the blame.

Hi, I’m Property & Casualty Consultant, Bob Norris, with another P&C Minute.

Keeping ahead of the complex array of ever-changing risks, litigation trends, and compliance issues that are impacting credit unions requires keen awareness, effective preparation, and loss control scrutiny. And, while each credit union has its own unique risk footprint, knowing which risks and loss trends that are impacting credit unions across the nation should be on your radar.

So, where should you begin? What are those emerging risks that you have to keep your eye on?

Drawing upon thousands of insights from credit union risk consultations and claims over the last 12-18 months, our Risk Management team at CUNA Mutual Group put together a series of web pages where you’ll find emerging risks, key questions, and discussion points to address at your credit union. Each topic concludes with related resource links to provide you with an in-depth look at the risks and proven mitigation guidance. Simply visit www.cunamutual.com/emerging-risk.

This Emerging Risks Outlook series examines hot topics such as overdraft/NSF fee litigation, Zelle/P2P fraud, ATM smash and grabs, remote work, marijuana banking, and due diligence to name just a few. All-in-all, there are currently 14 emerging risks covered with more being added throughout the year.

If you haven’t already considered some of these risk themes and takeaways in involving your risk oversight focus for 2022, then you should consider their relevance to your credit union’s strategy and ask why not.

Remember, risk management shouldn’t be the department that says no, but rather the function that helps shape credit union decisions and enables successful execution of your strategies. All with the emerging risk universe in mind.

For more information, be sure to contact your CUNA Mutual sales team.

March 2022

Ransomware in the Cyber Marketplace

Ransomware attacks continue to be carried out against industries of all types and sizes — including credit unions — and political unrest throughout the world has only served to magnify the threat.

Hi, I’m Property & Casualty Consultant, Nathan Cox, with another P&C Minute.

Frequently coupled with malicious email or targeted phishing, malware enters the soon-to-be-infected computer system, and encrypts data, making it unusable until a ransom is paid, and the bad actors provide an unlocking code.

As ransomware attacks continue in both frequency and severity, the potential exists for the cyber liability marketplace to take steps such as reduced coverage and limits, integration of coinsurance requirements, increased retentions, and even higher premiums.

But credit unions are not defenseless against ransomware and can take steps to help mitigate their risk. A critical element is Multi Factor Authorization, as is routine scanning of email and attachments, critical patching, and sophisticated Endpoint Protection. Employee training and awareness is key, and your CUNA Mutual Sales Team can help guide you to available resources, including those offered by cyber liability insurance carriers, cyber security vendors and CUNA Mutual’s Risk Management & Compliance Team.

January 2022

Is Your ATM and ITM Secure of Risk?

In today’s socially distanced world, criminals increasingly are turning their attention to the money inside automated teller machines. And their smash-and-grab method of extraction is causing havoc and occurring at an alarming rate at credit unions!

Hi, I’m Property &Casualty Consultant, Jeremy Goldman, with another P&C Minute.

ATMs and ITMs have become a major target of theft, especially those in remote locations or even the outmost drive-thru lane at your branch locations. The perpetrator’s plan is simple: aggressively attack the machine typically using stolen heavy-duty trucks with chains, construction type vehicles, equipment, and even explosives to rip apart the ATM or ITM and gain access to cash canisters and the money within.

The good news is there are several methods to secure stand-alone ATMs to the floor and walls to prevent the machine from being rocked or smashed from its foundation. In addition, the installation of bollards or steel barriers around and across the machines can serve as a deterrent. The more effort and time needed to gain access may discourage the criminals from attacking that machine.

The damage, or in some cases, complete destruction of these ATMs or ITMs can affect credit union operations as it may take weeks and significant financial resources before they can be repaired or replaced. Property and machine damage costs can exceed $100,000, in addition, it is not as easy to acquire a replacement due to supply chain disruptions and escalating costs.

ATMs and ITMs are an important piece of a credit union’s digital future but also bring an increased element of risk. When planning for that future, credit unions can always contact their CUNA Mutual Group sales team for assistance.