October 2008

JEWELRY INSURANCE ISSUES (formerly IM News), provides monthly insight and information for jewelry insurance agents, underwriters and claims adjusters.

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Jewelry Insurance Issues

Table of Contents

Click on article titles in red


What's a Certified Appraiser? - January

Best Appraiser Credentials - February

Are the diamonds you’re insuring real? - March

Handwritten Appraisals - April


Moral Hazard, Documents and the Bottom Line - January

Ruby and Jade - February

How to mail a diamond - March

Jewelry Insurance Appraisal Standards: JISO - April

Describing a gem's color - May

Why not just put jewelry on the Homeowner policy? - June

GIA Diamond Reports - July

Not just a pretty face - August

Moral hazards on the rise - September

Hurricanes, fires, floods—and jewelry insurance - October

Inherent vice / wear-and-tear losses are rising - November

FRAUD UPDATE – lack of disclosure, false inscriptions & doctored docs - December


Inflated appraisals—alive & well! Shady lab reports—alive & well! MORAL HAZARD—ALIVE & WELL! - January

Clarity Enhancements v. Inherent Vice - February

How green is my emerald? - March

Cruise Jewelry - What's the problem? - April

Crown of Light ® - how special is it? - May

Diamonds at Auction — Big gems, big prices, and the trickle-down effect - June

Are you sure her wedding jewelry is covered? - July

What Affects Jewelry Valuation? - August

What to look for – on the jewelry appraisal, on the cert, and on other documents - September

Growing Bigger & Bigger Diamonds - October

Scam season is always NOW - November

Ocean Diamonds - December


Pair & Set Jewelry Claims and the Accidental Tourist - January

Is that brand-name diamond a cut above the others? - February

Vacation Jewelry – Insurer beware! - March

Apple's Smartwatch – The risk of a wrist computer - April

Why you should read that appraisal - May

Smoking Gun! - June

Color-Grading Diamond: the Master Stones - July

Padparadscha—a special term for a special stone - August

Jewelry Appraisal Fees - September

Insuring a Rolex - steps to take, things to consider - October

Diamond camouflage and how to see through it - November

GIA Hacked! - December


Who Grades? - January

Sales, discounts, price reductions, bargains, specials, mark-downs . . . . and valuation - February

Credential Conundrum - March

Frankenwatches - April

Fakes, fakes, and more fakes - May

Marketing Confusion — What is this gem anyway? - June

12 Reasons Not to Insure a Rolex! - July

Why NOT to insure a Rolex: Reasons 5-7 - August

Why NOT to insure a Rolex: Reasons 8-10 - September

Why NOT to insure a Rolex: Reasons 11-12 - October

The Doublet Masquerade - November

Is the gem suitable for the jewelry? Is this a good insurance risk? - December


Wedding Rings on HO? NO! - January

Silver: the new gold - February

Point Protection - March

Tiffany v. Costco - April

What counts in valuing a diamond? - May

Appraising Jewelry - What’s a credential worth? - June

A Cutting Question concerning vintage diamonds - July

Synthesized Diamonds - Scam update - August

Pretty in Pink - Kunzite on parade... - September

Preventing jewelry losses - October

Scratch a diamond and you’ll find . . .??? - November

Synthetics in the Mix - December


Advanced Gem Lab - A deeper look at colored gems - January

Whose Diamond? - February

Appraisal Inflation - It Keeps On Keeping On - March

Big Emerald - April

Changing colors and making gems: Are we seeing "beautiful lies"? - May

Diamonds - Out of Africa. . . or out of a lab? - June

Appraiser's Dream Contest - July

GIA & the Magic of Certificates - August

Pricey when it’s hot: What happens when it’s not? - September

Fooling With Gold - October

Tanzanite – December's stone - November

Branding Diamonds - What do those names mean? - December


Unappraisable Jewelry - January

Replicas - Are they the real thing? - February

Composite Rubies- From bad to worse - March

Jewelry Hallmark - A Well-Kept Secret - April

Non-Disclosure: Following a Trail of Deception - May

Preserving the Diamond Dream - June

Spinel in the Spotlight - July

Jewelry 24/7 - Electronic Shopping - August

Diamond Bubble? - September

Disclosure: HPHT - October

"Hearts & Arrows" Diamonds - November

How a Gem Lab Looks at Diamonds - December


Emeralds - And What They Include - January

Pink Diamonds: From Astronomical to Affordable - February

Palladium-the Other Precious White Metal - March

Bridal Jewelry - April

The Corundum Spectrum - May

How Photos Cut Fraud - and help the insured - June

The Price of Fad - July

Old Cut, New Cut-It's All about Diamonds - August

EightStar Diamonds-Beyond Ideal - September

The Hazard of Fakes - October

Jewelry with a Story - November

Counterfeit Watches - December


Blue Diamond-cool, rare and expensive-sometimes - January

Turning Jewelry into Cash—
Strategy in a Bad Economy
- February

Enhancing the Stone - March

Being Certain about the Cert - April

Every Picture Tells a Story - May

Color-Grading Diamonds - June

The Newest Diamond Substitute - July

What Happens to Stolen Jewelry - August

Jewelry As an Investment - September

Black Diamond: Paradox of a Gem - October

Protect Your Homeowners Market—Keep Jewelry OFF HO Policies! - November

What’s So Great about JISO Appraisal Forms & Standards? - December


Garnet - and Its Many Incarnations - January

Organic Gems - February

Do Your Jewelry Insurance Settlements Make You Look Bad? - March

Don't Be Duped by Fake JISO Appraisal - April

Diamonds in the Rough - May

The Cultured Club - June

Sapphire-Gem Superstar - July

It's a Certified Diamond! 
- But who's saying so?
- August

FTC Decides: Culture Is In! - September

Paraiba Tourmaline – What's in a Name? - October

How Fancy is Brown? - November

CZ – The Great Pretender - December


Moissanite's New Spin - January

Online Jewelry - Buying and Insuring - February

Blood Diamonds - March

Damaged Jewelry, Don't Assume!- April

Chocolate Pearls - May

Appraisal Puff-Up vs Useful Appraisal - June

It's Art, but is it Jewelry?
- July

Diamonds Wear Coats of Many Colors - August

DANGER! eBay Jewelry "Bargains" - September

TV Shopping for Jewelry - October

Enhanced Emerald: clever coverup - November

How do you like your rubies -
leaded or unleaded?
- December


The New Platinum: A Story of Alloys - January

Ruby Ruse - February

How Big are Diamonds Anyway? - March

GIA Diamond Scandal
Has Silver Lining for Insurers
- April

Watch Out for Big-Box Retailers Insurance Appraisals - May

Mixing It Up: Natural and Synthetic Diamonds Together - June

Tanzanite - Warning: Fragile - July

Red Diamonds - August

Inflated Valuations & Questionable Certificates - September

Emeralds - October

Where Do Real Diamonds Come From? - November

Counterfeit Watches - The Mushroom War - December


The Lure of Colored Diamonds - January

Synthetic Colored Diamonds - February

Watches: What to Watch for - March

When is a Pear not a Pair? - April

The Truth About Topaz - May

White Gold: How White is White? - June

One of a Kind - or Not - July

Jewelry in Disguise - August

Valued Contract for Jewelry? Proceed with Caution! - September

Antiques, Replicas and All Their Cousins

Grading the Color of Colored Diamonds

New GIA Cut Grade for Diamonds - December


Synthetic Diamonds - and Insuring Tips - January

Bogus Appraisals and Fraud - February

A Picture is Worth Thousands of Dollars - March

Don't be Duped by Fracture Filling - April

Gem Scams Point to Need for Change - May

What is a Good Appraisal - June

4Cs of Color Gemstones - July

Gem Laser Drilling: The Next Generation - August

Why Update an Appraisal? - September

When to Recommend an Appraisal Update or a Second Appraisal - October

Secrets of Sapphire - November

Will the Real Ruby Please Stand Up - December


Mysterious Orient:
A Tale of Loss
- January

Bogus Diamond Certificates and Appraisals - February

Can Valuations be Trusted? - March

Spotting a Bogus Appraisal or Certificate - April

Counterfeit Diamond Certificates - May

Case of the Mysterious "Rare" Sapphires - June

Politically Correct Diamonds - July

Name Brand Diamonds - September

Princess Cut: Black Sheep of Diamonds - October

Reincarnate as a Diamond - November

Synthetic Diamonds - December


Irradiated Mail/Irradiated Gems - January

Fake Diamonds (Moissonite) - February

GIA Diamond Report - March

AGS and Other Diamond Certificates - April

Colored Stone Certificates - May

Damaged Jewelry: Don't Pay for Nature's Mistakes - June

The Case of the "Self-Healing" Emerald - July

Mysterious Disappearance: Case of the Missing Opals - August

The Discount Mirage - September

What Can You Learn from Salvage? - October

Gaining from Partial Loss - November

Year in Review - December


Colored Diamonds - January

Good as Gold - February

Disclose Gem Treatments - March

FTC Jewelry Guidelines - April

Myths Part I: Each Piece is Unique - May

Myths Part II: Myths, Lies, & Half-Truths - June

New Trend: Old Cut Stones - October

The Appraisal Process - November

Year in Review - December


Deceptive Pricing - January

Gems - Natural or Manmade - February

Jeweler/Appraisal Credentials - March

Fracture Filling - April

Salvage Jewelery - May

Gem Treatments - June

Don't Ask/Don't Tell - A Buying Nightmare - July

Laser Drilling of Diamonds - August

Jeweler Ethics or the Lack Thereof - September

Gem Scam - October

The Truth about Clarity Grading - November

Year in Review - December


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Paraiba Tourmaline – What's in a Name?

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In this case, it could be a lot of money. "The good name of Paraiba itself has been highjacked," claims the CEO of Paraiba.com, which has filed a $120 million lawsuit over how the word Paraiba can be used.

Tourmaline is a colorful stone. It's sometimes called the gemstone of the rainbow, because so many colors are possible. Some individual color variants even get their own names: intense red tourmaline is known as rubellite, for example, and blue is called indigolite. Often two or more colors appear in the same piece, as in the tourmaline that has red surrounded by green, which is known as "watermelon."

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They say each tourmaline is unique. Some change color in different lights, some are differently colored depending on the angle from which they're viewed. The  price range is large, with value depending on the richness of the stone's color.

Then there's Paraiba tourmaline, and that's another whole story—and a controversial one.


A Little Background

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In the mid 1980s an unusual tourmaline was discovered in the Brazilian state of Paraiba. It had traces of copper and manganese, which produced colors that ranged from—in the words of one jewelry trade journal—"dark sapphirelike blues to neon Windex blues to neon Scope mouthwash greens." Not very appealing metaphors, perhaps, but really striking colors in a gemstone.

The rare tourmalines immediately commanded top prices. Some Paraiba specimens sold for tens of thousands of dollars per carat.

But after a few years, mines in Nigeria began turning out tourmalines that resembled the Paraibas. And then mines in Mozambique. "Is Mozambique the new Paraiba?" wondered one gemologist. Purists wanted to distinguish Brazilian paraiba from African copper-bearing tourmaline.

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Eventually, the Laboratory Manual Harmonisation Committee (LMHC)—an international group formed by seven major labs to create standardized report language—stepped in. After much consideration, they decided paraiba (lower case) could be used to describe any tourmaline, regardless of provenance, that displayed the electric colors and intense saturation characteristic of the tourmaline originally mined in Paraiba. That is, paraiba would describe the color of the stone, not where it came from. As a separate entry, a lab could give the country of origin.

AGTA (American Gem Trade Association)'s Gemological Testing Center, for example, issues three types of of tourmaline reports:

The first 2 reports carry a comment stating that this variety "is also called paraiba tourmaline in the trade" and that such stones may come from a number of different localities.

The Lawsuit

Paraiba.com sells tourmaline jewelry and gems. It uses only stones that come from Paraiba in Brazil, not what it calls "African look-alikes." The suit claims that the LMHC and its affiliate labs have taken the provenance classification and redefined it as a color variety classification.

It charges AGTA and others with unfair competition and business practice. David Sherman, CEO of Paraiba.com, claims their actions have diminished the value of his company's rare gems and cost him devastating financial losses. Because tourmaline from the Paraiba mine is limited, the value of existing stones has increased over time. Redefining "paraiba" to include stones from other sites dilutes the value of "real Paraibas."

For some gems, provenance can dramatically affect price. Sapphires from Kashmir, Burma, and Sri Lanka (Ceylon), for example, fetch some of the highest prices because of their superior clarity, hue and saturation. It would be a business coup if tourmaline from Paraiba could have a cachet similar to that of sapphires from Kashmir. However, gemologists are finding that the striking coloration first found in Paraiba tourmaline is also seen in tourmaline from other mines.
Business profits aside, gemologists themselves are divided on whether gems from African mines—or other mines that might be discovered—should be called Paraiba. AGTA said gem traders "asked gemological labs to describe the gems on lab documents as ‘paraiba' tourmaline. This forced labs to come up with a definition." But some gemologists say lab reports should just describe the stone and leave the names to business marketing departments.

The defendant calls the suit totally without merit. The plaintiff claims the redefinition causes confusion and that ultimately the public is being harmed. Stay tuned . . . .

What It All Means for Insurers

We'll let you know when and how the suit is settled. For now all you need to remember is that "paraiba" (or "Paraiba") is a loaded word when it comes to valuation. Follow the cautions below.


"Paraiba" tourmaline commands a high price, so some sellers are likely to extend the reach of the word as far as possible.

Your client may present an appraisal from the seller. For high-value tourmaline, be sure to also get an appraisal from an independent jeweler/appraiser who is a Graduate Gemologist, preferably a Certified Insurance Appraiser™.

Ultimately it's quality that gives tourmaline its value. Be sure the appraiser is a jeweler who regularly deals in these stones, is aware of the current controversy over nomenclature, and is qualified to describe the colors appropriately and to judge value.

How the lawsuit is resolved may affect the future value of gems called "paraiba" tourmaline.

High-value tourmaline should be accompanied by a report from a reliable lab (such as  AGTA, AGL or Gübelin). It's best to have the report include the gem's country of origin. (The insured can take the jewelry to his own jeweler, who will send it to a lab that has the equipment and expertise to determine gem origin.)


Caution! Prices are volatile in this kind of market. When a new gem material is found, it can fetch a high price. But the novelty may be a fad that eventually wears out, and the value goes down. Or new sources of the gem are discovered, the uniqueness is diluted, and the value declines. Where rarity is at issue, price can change quickly. However the Paraiba suit is decided, it will have an impact on valuation of this stone.

When settling a claim on Paraiba tourmaline, be sure to consult a jeweler who regularly deals with tourmaline and can determine quality and valuation in the current market.

Not only the provenance of tourmaline but also the quality of the gem is important in determining valuation. Look to the appraisal for details, especially in the color description.

If the country of origin is not given for Paraiba tourmaline, use every means possible to determine it. If necessary, consider consulting your jewelry insurance expert to avoid overpaying a settlement.

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