Thursday, January 31, 2008

Maine Gov. Nominates Superintendent

Maine Gov. John Baldacci recently announced the nomination of Mila Kofman as superintendent of the Maine Bureau of Insurance, the State’s insurance regulatory agency. The Bureau is responsible for overseeing more than 1,100 insurance companies and nearly 60,000 agents licensed to do business in Maine. Kofman currently serves as Associate Research Professor at the Georgetown University Health Policy Institute in Washington, D.C. She has led research projects at the Institute focused on public and private mechanisms to address the issue of the uninsured, health care fraud and other issues. Other projects she has spearheaded have been funded through such groups as the Robert W. Johnson Foundation, The Commonwealth Fund, and the Blue Cross Blue Shield Association, among others. Kofman has served as a consumer representative at the National Association of Insurance Commissioners (NAIC) since 2002. She was appointed co-editor of the Journal of Insurance Regulation in 2005. She has been a presenter at a variety of state and national health care meetings and briefings during her career, and has been widely published. If confirmed by the Legislature, Kofman would fill the position through April 2009, the expiration of the five-year term of former Superintendent Alessandro Iuppa.

Ohio Director Offers Terror Risk Act Bulletin

Ohio Department of Insurance Director Mary Jo Hudson has issued a bulletin concerning the recent extension of the Terrorism Risk Insurance Act (TRIA), as enacted by Congress and signed by the President. The bulletin advises Ohio insurers of certain provisions of the Terrorism Risk Insurance Program Reauthorization Extension Act of 2007 that may require insurers to submit a filing to the Department. "There have been several provisions of the initial Act that have changed in the Extension Act of 2007,” said Director Hudson. “Given that insurers and advisory organizations must accelerate filing activity in order to achieve compliance with the Act, the Department will assist by permitting filings for terrorism losses to be submitted on a use & file basis." The Department will suspend its “Prior Approval” and “File & Use” filing procedures until April 1, 2008. This suspension applies only to rate, rule and forms filings pertaining to “certified” and “non-certified” terrorism losses for commercial property and casualty lines of business. Signed into law in 2002, the Terrorism Risk Insurance Act provides a federal backstop for defined acts of terrorism and imposes certain obligations on insurers. The Act was extended for a two-year period in 2005 and was recently extended again through 2014.

Changes to the initial Act include:

  • Revising the definition of a certified act of terrorism to eliminate the requirement that the individual(s) are acting on behalf of any foreign person or foreign interest.
  • Extending the program through Dec. 31, 2014.
  • Requiring clear and conspicuous notice to policyholders of the existence of the $100,000,000,000 cap.
  • Wednesday, January 30, 2008

    Ore. Aid Tops $11.2M for Recent Storms

    More than $11 million in disaster assistance is now approved for Oregonians, according to officials with Oregon Emergency Management (OEM), the Federal Emergency Management Agency (FEMA), and the U.S. Small Business Administration (SBA). A total of $11.2 million has been approved as of Jan. 24, 2008. Oregon businesses, families and individuals with damages from the severe storms, flooding, landslides and mudslides Dec. 1-17, 2007, in disaster-declared counties are eligible to apply for disaster assistance. The counties of Clatsop, Columbia, Polk, Tillamook, Washington and Yamhill are declared for individual assistance. The U.S. Small Business Administration (SBA) has approved 121 loans loans totaling $5,847,800 in disaster loan assistance. The SBA is the primary source of federal funds for long-term disaster recovery for owners of private property, including homeowners, renters, non-farm businesses of all sizes and private non-profit organizations. These low-interest loans cover costs of repair or replacement of damaged real estate, personal property and business assets not fully covered by insurance or other aid, and for small businesses, such loans cover working capital needs caused by the disaster.

    Calif. Wildfire Fed Aid Close to $140M

    Three months after wildfires raged through Southern California, state and federal disaster assistance has reached nearly $140 million to help pay for firefighting, debris removal and other response and recovery efforts.

    Here is a summary of funding since the Oct. 24, 2007, presidential disaster declaration:

    • SBA: $78.6 million. The bulk of the disaster assistance funding has come from the U.S. Small Business Administration (SBA) in the form of long-term, low-interest loans to business and home owners for repair or replacement of damaged structures.

    • Public Assistance: $44 million has been obligated to reimburse state and local governments for firefighting efforts, debris removal, repair or replacement of public buildings and infrastructure and other wildfire-related losses and expenses. The Federal Management Agency (FEMA) pays 75 percent of those funds, with the remaining 25 percent split between the state of California and local applicants on a 75-25 percent cost-share basis.

    • Housing Assistance: $9.5 million in grants has been disbursed to homeowners for home repair or replacement and temporary housing.

    • Other Needs Assistance: $3.9 million has been given by the state and FEMA for losses and damage to personal property, vehicle repair or replacement, moving expenses and other disaster-related costs.

    • Unemployment Benefits: $1.76 million. California's Employment Development Department has administered $1.53 million in Unemployment Insurance and more than $235,000 in federally funded Disaster Unemployment Assistance for those who lost work due to the fires but who did not qualify for regular unemployment insurance.

    • California State Supplemental Grants: $1.9 million in grants has been approved by the California Department of Social Services for those who have received the maximum grant from FEMA.

    FEMA Grants Conn. Gov. Fire Request

    Connecticut Gov. M. Jodi Rell said recently that the Federal Emergency Management Agency has granted her request for a 30-day extension to possibly request a major disaster declaration stemming from the Dec. 12, 2007, fire in downtown New Haven. “This devastating fire has already cost the public sector more than $4 million, and that number continues to increase," Rell said. "The impacts on business owners and others in the area have yet to be fully calculated, but we can be sure they are sizable, given that the fire came just as the holiday shopping season was peaking.” Once that dollar figure is finalized, Commissioner James Thomas of the Department of Emergency Management and Homeland Security will, if appropriate, request a formal preliminary damage assessment in accordance with FEMA rules. The three-alarm fire totally destroyed several downtown businesses, including a bar that had just opened, and affected a number of others.

    ASI Lloyds Enters La. Market

    ASI Lloyds (ASI), of St. Petersburg, FL, reported its entrance into the personal property insurance market in Louisiana. ASI was recently a recipient of the Insure Louisiana Incentive program sponsored by the state. ASI's intention is to write new Homeowners and Dwelling Fire policies in Louisiana in the second quarter of 2008. The company was recently upgraded to an A- (Excellent) Financial Strength Rating by A.M. Best. ASI Lloyds Inc. is a subsidiary of American Strategic Insurance Corp. domiciled in Florida. The ASI group of companies specializes in homeowners insurance and has more than 320,000 policy holders in Florida, Texas and Colorado. The company is also a Write Your Own (WYO) Flood Service Provider nationally. ASI employs 150 people in its St. Petersburg offices.

    Tuesday, January 29, 2008

    Okla. Gov. Appeals Denial for Aid

    Oklahoma Gov. Brad Henry has filed a formal appeal on behalf of Oklahoma ice storm victims, asking the Federal Emergency Management Agency to reverse its recent decision denying individual assistance to those hard hit by last month’s historic winter weather. The December ice storm left more than 640,000 homes and businesses without power and caused 29 deaths. On Jan. 9, Gov. Henry requested individual assistance for two of the state’s hardest hit areas, Tulsa and Oklahoma counties, but FEMA denied the request, claiming state, local and volunteer organizations could address the damages. In its assistance request, the state cites multiple disasters in 2007, ice storm damages to homes and businesses, the fiscal impact to businesses closed by power outages and the continuing health hazard of remaining storm debris, among other things. An individual assistance declaration would make Oklahomans eligible for assistance with housing repairs or temporary housing and disaster unemployment assistance. It would also provide for U.S. Small Business Administration (SBA) low-interest loans for individuals and businesses and grants for serious needs and necessary disaster expenses not met by other programs.

    Pa. Farmers to Receive Crop Assistance

    Pennsylvania farmers will receive $1.5 million in state assistance for their 2008 crop insurance premiums, Agriculture Secretary Dennis Wolff announced. The assistance is provided through the Pennsylvania Crop Insurance Assistance Program, a partnership between the General Assembly, U.S. Department of Agriculture, crop insurance industry, farmers and the Department of Agriculture. Producers will receive premium discounts of approximately 5 percent of their net premium.In the last five years, $140 million in crop insurance loss payments have been paid to producers, compared to $44 million in paid premiums – a more than $3 return on every dollar invested. Producers are reminded that March 17 is the deadline for enrollment in crop insurance for 2008 spring planted crops.For more information on crop insurance, visit www.agriculture.state.pa.us/cropinsurance.

    Nevada Adds Auto Theft, Fraud Task Force

    Following a tour of the Vehicle Investigations Project for Enforcement and Recovery (VIPER) bait car program, Nevada Gov. Jim Gibbons announced the formation of a task force that will address fraud and auto theft in Nevada. The VIPER program, led by Lt. Robert Duvall, includes law enforcement representatives from the Las Vegas Metropolitan Police Department, North Las Vegas Police Department, Henderson Police Department, the Nevada Highway Patrol, and receives assistance from the Nevada Transport Authority. The Auto Theft and Insurance Fraud Task Force will be charged with identifying the scope of the Nevada insurance fraud and vehicle theft problem and its affect on Nevada consumers as well as review potential solutions. The task force will take a statewide approach to ensure that all stakeholders are represented. Last year, the Las Vegas Metropolitan Statistical Area was ranked as the number one city in the nation for vehicle theft, a number one rating that the Governor wants to see erased. The Governor indicated that the task force will investigate the issue of organized insurance fraud, vehicle theft and methods to combat these problems. Gibbons added that he will seek task force representatives from federal, state and county agencies; the insurance industry; and collision repair, medical and legal communities.

    U.S. DOT Notes Roof Strength Upgrades

    The U.S. Department of Transportation has issued a modification of its proposed new roof crush standard to request public input on whether both sides of a vehicle roof should be tested and meet minimum forces. If adopted, the two-sided testing would require manufacturers to design vehicle roofs that withstand at least 2.5 times the weight of the vehicle on both sides of the roof as an alternative to testing just one side. A proposal, announced in August 2005, would require auto makers to build vehicle roofs to withstand a force equal to 2.5 times the vehicle weight, as applied to only one side. The proposed roof strengthening would apply to vehicles weighing up to 10,000 pounds. Secretary Mary Peters noted that the amended roof crush proposal is part of a comprehensive program to reduce rollover fatalities and injuries, and includes mandating new technologies such as Electronic Stability Control which can save an estimated 9600 lives a year, as well as stronger door locks. She also noted that using seat belts remains the most effective way to prevent fatalities and injuries in all types of crashes, including rollovers. Nicole Nason, administrator of the National Highway Traffic Safety Administration, said that the earlier roof crush proposal was being amended at this time because extensive research conducted since August of 2005 indicates that the double-sided testing procedure is now a viable alternative approach to improve vehicle roof strength. The agency plans to issue a final rule by the summer of 2008.

    HRH to Acquire Talty Ins. Agency Assets

    Virginia-based HRH (Hilb Rogal & Hobbs Company) has signed a definitive agreement to acquire substantially all of the assets of Talty Insurance Agency, Inc. (Talty). The transaction is expected to be complete this Friday. Terms of the transaction were not disclosed. Denver-based Talty has been independently owned since its foundation in 1973. With more than $2.7 million in annual revenue, Talty offers tailored coverage for both property and casualty and employee benefits clients, with a focus on community associations, small business insurance and personal insurance. Talty is the third organization to join HRH's Colorado operation in the past year; The Urman Company and Brown/Raynor Corporation were acquired in June and July 2007, respectively. HRH is the eighth largest insurance and risk management intermediary in the United States, with more than 140 offices throughout the United States and the world.

    Travelers Cos. Sees Q4 Profit Fall 11%

    Commercial insurer Travelers Cos. said Tuesday its fourth-quarter profit dropped 11 percent on lower premiums and investment income. For the three months ended Dec. 31, net income fell to $1.06 billion, or $1.64 per share, from $1.19 billion, or $1.68 per share, a year ago. Excluding items, profit totaled $1.63 per share in the latest quarter, compared with $1.69 per share in the prior-year quarter. Net investment income dipped to $696 million from $701 million in the 2006 quarter, due to slightly lower returns in the non-fixed income portion of its portfolio. Net written premiums of $5.4 billion fell 1 percent, but were flat when adjusted for the sales of Afianzadora Insurgentes and Mendota. Retention rates were positive but renewal price changes were slightly weaker and new business volumes declined amid competition. Personal insurance had a $201 million operating profit, down from $348 million a year ago on higher weather-related losses and a lack of favorable prior-year development.Travelers noted its business segment had an operating profit of $729 million for the quarter, a gain from $703 million during the same period a year ago. That was following $3 million in losses from the southern California wildfires. Net written premiums dropped 2 percent from a year ago. The company said retention was "extremely strong" but renewal pricing was slightly lower than recent quarters, and new business volumes dropped versus a year ago.

    Monday, January 28, 2008

    Fla. Officials Report $6M Settlement

    Florida Attorney General Bill McCollum, Chief Financial Officer Alex Sink and Insurance Commissioner Kevin McCarty recently announced that Florida and nine additional states have reached a settlement with a large insurance carrier said to be involved in a “pay-to-play” scheme reportedly orchestrated by insurance broker Marsh & McLennan. The Travelers Companies Inc. will pay a multi-state task force $6 million to resolve allegations of improper business steering in the commercial insurance market that resulted in higher premiums being paid by Florida governmental entities, companies and nonprofit organizations. Travelers allegedly conspired with Marsh & McLennan and other brokers to create the illusion of a competitive bidding process by submitting fake bids even though the brokers had already determined which insurer would receive a particular policyholder’s business. Travelers paid “contingent commissions” to these brokers, and these commissions were not disclosed to policyholders. The Florida Attorney General’s Office, Department of Financial Services and Office of Insurance Regulation will receive approximately $1.1 million of the settlement which will fund a reimbursement pool for affected public entity policyholders and repay the state agencies’ costs of investigation. In addition to the financial settlement, Travelers has agreed to a consent decree and final judgment that will provide comprehensive injunctive relief, including a requirement to disclose compensation that Travelers pays to insurance brokers. The company will also be required to disclose to all customers and prospective policyholders the ranges and averages of payments it made to insurance brokers on specific lines of insurance. The consent decree and final judgment were to be filed in Leon County Circuit Court. Travelers has cooperated with the multi-state task force and will provide assistance to the states as they continue their investigation of insurance brokers and other insurers. The company has already reimbursed a nationwide group of policyholders for overcharges and has adopted significant business reforms that govern its bidding and underwriting practices.

    RMS: Ice Storm Repeat Could be Costly


    Risk Management Solutions (RMS), a provider of products and services for catastrophe risk management, has released a 10-year retrospective report on the 1998 Ice Storm that devastated the Canadian provinces of Ontario and Qu├ębec, as well as portions of the northeastern U.S., in January 1998. Despite the positive advances made in the affected region since that time, a recurrence of the ice storm today would result in total insurance losses of between $1.0 and $3.0 billion potentially over twice the $1.3 billion cost incurred in 1998, according to RMS (www.rms.com).

    From Jan. 4-10, 1998, a series of storms produced large amounts of freezing rain from northern New York State through the St. Lawrence River Valley region, with some locations receiving close to 4 inches. Although freezing rain is not uncommon in these regions during the winter months, the 1998 Ice Storm was unique in its long duration, large geographical extent, and extraordinary freezing rain precipitation totals. Causing considerable damage, widespread power outages, and 45 fatalities, the event is widely acknowledged to be Canada’s costliest natural disaster and the most severe ice storm to hit the region since at least the 1920s.

    Potential insured losses from a 2008 recurrence of the storm fall into three categories: direct physical damage to automobile and property, additional living expenses, and refrigerator and freezer contents that may be lost a result of prolonged power outages. Property damage could be expected to be greater than in 1998 due to the increased concentration of buildings in the area.

    Although major improvements have been made to the Hydro-Quebec electrical power grid, an ice storm of this magnitude would still cause significant and lengthy power outages. However, since 1998 many homeowners and businesses have purchased generators and non-electrical stoves and heaters to ensure that they would not have to evacuate in the event of a storm and incur additional living expenses or losses to their refrigerator and freezer contents.

    Calif. Drivers Reminded of Wet Perils

    As wet weather covers California, slick and flooded roads threaten to wreak havoc for drivers, according to the Insurance Information Network of California (IINC). Reports say at least two traffic fatalities were believed related to the most recent weekend storm. Motorists having to drive in wet weather should slow down, allow more space between cars while driving, turn on their headlights and not try to navigate deep pools of water at flooded intersections.

    If involved in an accident, drivers should:
    • Take reasonable steps to protect your vehicle from further damage and move it out of traffic as soon as it is safe. • If someone is injured, call the police or highway patrol. Tell them how many people were hurt and the types of injuries. • Take notes at the accident scene. If possible, take pictures. • Exchange and note the following information: License plate numbers; make and model of each car; driver’s license numbers; insurance identification, including name of insurance company, broker or agent, and policy number; names, addresses and phone numbers of witnesses and names and badge numbers of police officers or other emergency personnel. • If you run into an unattended vehicle or object, try to find the owner. Otherwise, leave a note with your name, phone number and insurance information so that they can contact you. Remember that leaving the scene of an accident, no matter how small, is a crime. • Report the accident to the Department of Motor Vehicles within 10 days if property damage exceeds $500. • Do not discuss the financial limits of your insurance policy.

    After an accident, regardless of who is at fault, it is important to immediately call your insurance agent, broker or company to report the incident. You should find out whether you are covered for this loss.

    Ohio Department Unveils Claim Report

    The Ohio Department of Insurance has issued its second annual Ohio Medical Liability Closed Claim Report, Director Mary Jo Hudson announced. Data collected from entities providing medical malpractice coverage to Ohio health care providers and health care facilities shows a total of 4,004 medical malpractice claims were closed in 2006. Claims that generated an indemnity payment, which is the amount of compensation paid on behalf of each defendant to a claimant, averaged $288,080 per claim.

    Some key findings in the report include:


  • Total Claims: A total of 4,004 claims were reported for 2006 by 93 entities. Authorized insurers reported the majority of the claims, 2,495. Self-insured entities reported 1,283 claims, surplus lines insurers reported 169 claims and risk retention groups reported 57 claims. For 2005, a total of 5,051 claims were reported by 91 entities.
  • Indemnity Payments: Almost 80 percent of medical malpractice claims resulted in no payment to a claimant. A total of 3,210 claims had no indemnity payments while 794, or 20 percent, closed with an indemnity payment. The total amount paid to claimants was $228,735,572, an average of $288,080 per claim for those claims that generated an indemnity payment. Similarly, in 2005, 20 percent of the claims closed with an indemnity payment, averaging $269,374 per paid claim.
  • Claim Expenses: While most medical malpractice claims closed with no payments to claimants, almost all claims generated expenses for investigation and defense. These expenses totaled $88,131,139, an average of $25,672 per claim. In 2005, the average expenses per claim were $24,443.


  • Wash. Med-Mal Insurer Seeks Premium Drop

    Washington’s largest writer of medical malpractice coverage for physicians and surgeons has called for a 12.5 percent overall decrease in premiums for 2008 following what appears to be a record-setting year of profits for the company in 2007. The rates, effective Jan. 1, 2008, were announced by Physicians Insurance, the Seattle-based company that provides coverage for approximately 62 percent of the physicians in Washington who purchase medical malpractice insurance from a regulated insurer. Although base rates remained stable, the company’s action will reportedly result in premium reductions of up to 20 percent for physicians with good claims experience. The declining cost of medical malpractice insurance in Washington seems to reflect a trend seen in many states across the nation. However, unlike other states where tort reform advocates have drawn a direct correlation between declines in premiums and tort reform legislation, Washington’s doctors are reportedly benefiting despite the failure of a tort reform initiative at the hands of voters in 2005. Through the first nine months of the year, Physicians Insurance reported profits totaling $17 million.

    Mass. Offers Agent Finder Web Site

    Massachusetts Commissioner Nonnie Burnes has unveiled AgentFinder, a Division of Insurance Web site designed to make it easier for Massachusetts consumers to find insurance agents and insurance products in the state. AgentFinder connects consumers to insurance professionals based on criteria provided by the consumer and is available at: http://www.agentfinder.doi.state.ma.us. The Division said it frequently receives calls from consumers looking for a simple and efficient way to find professionals and companies that sell products ranging from automobile, homeowners, life or health insurance to the more specialized lines of pet, travel and wedding insurance. AgentFinder allows consumers to generate a list of agents from a database of the state’s 70,000 licensed insurance professionals based on the geographic, product and company specifications that he or she selects. The Web site’s search methods are flexible. Consumers can perform a general agent search by entering their zip code and selecting between auto, homeowners, life or health insurance. They can also conduct a detailed agent search by entering the agent’s name, business location, company or product.

    Sunday, January 27, 2008

    Zurich Purchases Turkish Insurer

    Zurich Financial Services Group (Zurich) has signed an agreement to acquire 100% of general insurer TEB Sigorta A.S. from TEB Mali Yatirimlar A.S. (TEB Mali). TEB Sigorta will maintain distribution arrangements with various TEB Mali subsidiaries for the distribution of general insurance products on an exclusive basis. This acquisition reportedly allows Zurich a successful entry into the attractive Turkish market. TEB Sigorta is reportedly one of the fastest growing and most profitable general insurance companies in Turkey with a strong focus on banc-assurance. Premiums collected in 2007 were approximately USD 130 million (YTL 155 million). It currently distributes its products through an extensive network of regional offices, agents, brokers and financial institutions offering access to more than 600 points-of-sale. Zurich reportedly considers Turkey an attractive growth market. Between 2003 and 2006 the Turkish insurance sector grew at a cumulated average growth rate (CAGR) of 24% while the insurance penetration is reported to be considerably lower compared to other Central and Eastern European countries. The acquisition will be managed from Zurich’s Central and Eastern Europe (CEE) business unit in Vienna which includes the Group’s existing Austrian and Russian operations.

    Arch Insurance Group Unveils Product

    Arch Insurance Group, a member of Arch Capital Group Ltd., is offering a new property insurance product, the Arch Property Maximizer PolicySM, which will be underwritten by Archs Global Property division. The Arch Maximizer Policy provides supplemental property insurance payouts based on a fixed percentage of an insureds loss paid under the insureds original property insurance policy. The Arch Maximizer Policy will be distributed through select retail brokers and may be written on a ground-up quota share or excess basis with capacity up to twenty percent (20%) or $50,000,000 per occurrence and annual aggregate. Current Arch participation on the original property policy is not required to access this product. Coverage under the Arch Maximizer Policy will be offered on the same basis as the insureds original property insurance policy. All risks including, earthquake, flood, windstorm, boiler and machinery, and terrorism, may be included under this product. For further information, visit www.archinsurance.com.

    Ernst & Young Notes '08 U.S. P&C Outlook

    Margin compression and continued pricing erosion will put increasing pressure on the insurance industry to achieve top line objectives in 2008, according to Ernst &Young’s Global Insurance Center. Companies need to make significant changes and seek alternative growth strategies if they are to remain competitive and survive in the challenging and complex business environment ahead. EY noted six key issues in 2008 to influence the property/casualty industry:
    1. Striving for Growth: In spite of another year of great earnings, insurers will be challenged to sustain growth in 2008. EY expects margin compression to accelerate over the next 12 months. However, stronger balance sheets and an accumulation of capital will enable insurers to increase share buybacks, boost dividends, enter emerging markets and accelerate merger and acquisition activity. With these prevailing conditions, consolidation is more likely.
    2. Operational Transformation: The search for growth and profitability is driving companies to focus on better business alignment and expense control. In 2008, insurers will also take a harder look at evaluating outsourcing and offshoring, particularly for back-office functions and customer-facing business processes. In addition, developing a formal strategic cost management program will be a critical facet of operational transformation.
    3. Catastrophe Solutions: Impending soft market conditions will test each company’s ability to maintain underwriting discipline and achieve reasonable profits. EY believes that insurers should continue to invest in their ability to understand catastrophe risk and improve underwriting performance. This involves an investment in resources, technology and operational procedures. Only those who can find solutions within this fundamental framework will stay the course.
    4. Financial Events: Over the last five years, insurers have increased their investments in alternative asset classes which has led to greater credit risk exposure. Now is the time to take action and focus on building risk infrastructure and creating more transparency commensurate with the nature of these important investments. Organizations that embrace the people, systems and processes to accurately comprehend and manage the risks of these asset classes may gain a competitive advantage.
    5. Solvency II (SII): The search for growth and profitability is driving companies to focus on better business alignment and expense control. In 2008, insurers will also take a harder look at evaluating outsourcing and offshoring, particularly for back-office functions and customer-facing business processes. In addition, developing a formal strategic cost management program will be a critical facet of operational transformation.
    6. International Financial Reporting Standards (IFRS): Regardless of the implementation date being delayed, the time for IFRS is now. Companies need to develop a plan that includes steps to assess the impact of the proposals on their financial statements, educate key employees and constituents, and evaluate the readiness of their organization for implementation.

    For further information, visit www.ey.com.

    Aetna, Ga. Health Provider Ink Deal

    Aetna has reached agreement with Central Georgia Health Network (CGHN) on a multi-year contract that adds the Medical Center of Central Georgia and its affiliated physicians to Aetna’s provider network in the Macon area. The agreement provides current and new Aetna enrollees with access to the CGHN provider network. Under the agreement, members of Aetna network-based plans will be able to receive covered in-patient and out-patient services, at in-network rates, from the Medical Center of Central Georgia, the children’s hospital in Macon, home health, home infusion, three urgent care centers, radiology centers, a rehab hospital, an ambulatory surgery center, and approximately 180 physicians who previously had not participated with Aetna. These physicians include hospital-based doctors and community physicians. Aetna members will continue to have access to about 220 of CGHN’s affiliated physicians who had previously established contractual arrangements with Aetna. Aetna provides and administers health benefits to more than 500,000 members in Georgia.

    NAMIC at Odds on Colo. Credit Score Ban

    Colorado lawmakers are faced once again with a proposed ban on credit scoring for insurance underwriting, according to the National Association of Mutual Insurance Companies (NAMIC). HB 1143 would reportedly prohibit an insurer from using credit scoring for the acceptance, denial, renewal, or rating of a potential insured for insurance underwriting purposes in connection with property/casualty insurance. The bill was introduced in the Colorado House of Representatives and assigned to the House Business Affairs and Labor Committee. “NAMIC is disappointed to see that a credit scoring ban bill has reared its ugly head in Colorado again,” said Christian Rataj, NAMIC’s Western state affairs manager. “Insurance consumers have dodged this bullet in three of the past five legislative sessions, but it keeps reappearing like a bad rash that needs to be permanently cured.” Rataj noted that several recent federal and state government studies have validated the use of credit scoring as a legitimate and reasonable underwriting tool that does not unfairly discriminate against certain population groups. “It appears as though the advocates of a credit scoring ban just don’t want to accept the repeatedly proven fact that credit-based insurance scoring is good for the vast majority of insurance consumers in the state as it assists insurance carriers in their efforts to provide insurance consumers with rates that fairly and accurately reflect a consumer’s personal risk of loss exposure,” he added.

    Saturday, January 26, 2008

    Allstate Unveils Online Auto Tools

    Allstate recently unveiled a pair of new online interactive auto insurance-related tools on Allstate.com that serve to answer common questions in plain English and help consumers better understand their insurance needs. Bumper-to-Bumper BasicsSM is an interactive, video-enhanced guide that reportedly helps consumers assess their state-specific auto insurance needs, and Ballpark Estimator is set to allow users to remain anonymous while obtaining an estimated auto insurance quote from Allstate. Upon entering Bumper-to-Bumper Basics, visitors are greeted by an interactive tour guide who helps users navigate through the site. After entering a residential zip code, the tool will help visitors identify their personal risk profile by asking a series of questions, such as: the age and purchase price of the car, whether or not they have health insurance, and if they own or rent their home. Upon completing the questions, a list of policy coverages are generated to give a clear picture of each visitor's potential personal protection needs. Bumper-to-Bumper Basics also defines insurance terms and provides examples, helping consumers understand: the difference between comprehensive and collision coverage, how to be financially protected from a covered accident caused by an uninsured motorist, and what bodily injury liability is vs. personal injury protection and other insurance topics.

    La. Offers Home Owner Insurer Incentives

    Insurance premium discounts will be available in 2008 to Louisiana home owners who install storm mitigation improvement devices or build or retrofit their homes to comply with the State Uniform Construction Code according to Commissioner of Insurance Jim Donelon. Regulation 94, which provides details for the implementation of Act 323 of the 2007 Louisiana Regular Legislative Session, became effective on Jan. 20. Act 323 gives home owners incentives in the form of insurance premium discounts when building or retrofitting a structure to comply with the Louisiana State Uniform Construction Code. Insurance premium discounts for home owners pursuant to Regulation 94 will be available in 2008 after the insurers’ rate filing with the Louisiana Department of Insurance between March 31, 2008 and Jan. 1, 2009. This rate filing will include the new premium discounts when an owner builds or retrofits a structure to comply with the requirements of the State Uniform Construction Code, installs damage mitigation improvements, or retrofits their property utilizing construction techniques demonstrated to reduce the amount of loss from a windstorm or hurricane. Premium discounts apply to one or two-family owner occupied homes and modular homes. They do not apply to commercial or commercial residential properties with three or more units, or to manufactured or mobile homes. The Department of Insurance will post a brochure on home owner storm mitigation incentives on its Web site at www.ldi.state.la.us under the publications tab for insurance agents and home owners to access.

    Berkshire Hathaway Adds Swiss Re Stake

    Swiss Re has reported that Berkshire Hathaway has acquired a 3 percent stake in the company. Swiss Re has also entered into a reinsurance contract with Berkshire Hathaway. The capital released as a result of this reinsurance contract will be used to buy back shares. Swiss Re has also entered into a proportional reinsurance contract with Berkshire Hathaway. Under this quota share arrangement, Berkshire Hathaway will assume a 20% share of all Swiss Re's property and casualty business for the next five years. The contract is effective as of 1 Jan. 2008. This will lead to a reduction in the capital deployed in Swiss Re's P&C business.

    Friday, January 25, 2008

    2007 New York Auto Insurer Complaint Ranking Unveiled

    The New York State Insurance Department released its 2007 Annual Ranking of Automobile Insurance Complaints, which measures the number of complaints filed against insurance companies as a percentage of their total private passenger auto insurance. The 2007 ranking is compiled using data from 2005 and 2006. Data from two years are analyzed. This compensates for the fact that some complaints closed in any given year are begun in the previous year. Typical consumer complaints involve monetary disputes, such as the value of a total loss, or insurance companies that do not renew policies. The 2007 ranking shows that 7,914 complaints were filed against auto insurance companies or groups of companies in the state. Of that number, 1,629 complaints were upheld in favor of consumers; 4,243 complaints were not upheld; and 2,042 complaints were ruled as “question of fact” cases. Questions of fact disputes are not counted against insurers because the Department cannot legally determine the facts of these cases. New Yorkers spent more than $10 billion on private automobile insurance in 2006. The report shows that one upheld complaint was recorded for every $6.2 million in premiums paid to insurance companies. The 2007 ranking is posted on the Department’s Web site at: http://www.ins.state.ny.us/arkidx.htm

    PCI Supports Garrett-Frank Flood Bill

    Wednesday's (Jan. 23) House passage of H.R. 3959, which would require buyers of residential homes costing $600,000 or more to pay phased-in, actuarial flood insurance prices, is a positive step toward shoring up the National Flood Insurance Program (NFIP) without creating unanticipated premium increases, according to the Property Casualty Insurers Association of America (PCI). The bipartisan bill, introduced by Rep. Scott Garrett (R-N.J.) and House Financial Services Committee Chairman Barney Frank (D-Mass.), will help phase out subsidies for homes built before flood insurance rate maps went into effect in 1974. Ending these subsidies is reportedly a crucial step toward making the NFIP actuarially sound.

    U.S. Department of Labor Assists N.C. Workers to pay for Health Insurance

    The U.S. Department of Labor announced Friday a $1,250,000 National Emergency Grant to the state of North Carolina to help provide assistance in paying health insurance premiums to approximately 1,800 dislocated workers who are eligible for the Health Coverage Tax Credit. The assistance is available through the Trade Adjustment Assistance (TAA) Reform Act of 2002. Payments made through this grant will cover up to 65 percent of the cost of health insurance premiums during the one to three months required for the IRS to enroll, process and begin providing payments for eligible individuals.


    Fire At Monte Carlo Hotel-Casino in Vegas

    A fire at Las Vegas' Monte Carlo hotel-casino was extinguished shortly after an hour Friday. According to authorities, the three-alarm fire was reported shortly before 11 a.m. local time on the roof of the resort. Several top floors of the building were ablaze and had been evacuated. Initial reports did not indicate that anyone was injured or trapped in the blaze. Patrons and workers have been evacuated from the Monte Carlo, while people at The Bellagio and New York-New York casinos were preparing to leave if necessary. The Monte Carlo, located at 3770 Las Vegas Blvd. South, offers 3,002 guest rooms, including 211 suites. The fire had a much better outcome than the infamous MGM Grand fire of Nov. 21, 1980. In that blaze, 84 people perished and nearly 700 were injured. It was the second largest loss of life hotel fire in U.S. history. The 1980 fire resulted in major lawsuits against the hotel. The majority of the suits were settled for around $105 million. Reports say MGM Grand was insured for some $30 million in liability insurance at the time of the deadly blaze.

    Thursday, January 24, 2008

    Daily Insurance News Has Arrived

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