Markel Purchases Specialized Insurance Inc.

Markel Insurance Company has acquired Specialized Insurance Inc., of Blair, Nebraska. Specialized Insurance provides admitted garage program coverage primarily in the western United States, with concentration in California, Oregon, Arizona, Washington, Nevada, and Colorado. The program covers non- franchised used car dealers, repair shops, gas stations, body shops, lube & tune centers, and car washes. The transaction closed on April 1, 2008. The Specialized office in Nebraska will become a Markel Insurance Company underwriting and marketing office, and will continue to service existing and new accounts.

WCRI: Wisconsin Comp Costs Per Claim Grow

The average workers’ compensation total cost per claim in Wisconsin grew rapidly for four of the five years in the study period including 8 percent in 2005/2006 claims, according to a new study by the Workers Compensation Research Institute (WCRI). This growth was driven primarily by the increase in the medical payments per claim.

Medical costs per claim with more than seven days of lost time grew throughout the study period, with double-digit growth in four of the five years in the study period, including 14 percent in 2005/2006.

The study by the Cambridge, Mass.-based WCRI also noted that the average total cost per claim in Wisconsin was among the lowest of 14 states – 36 percent lower than the median of the study states for 2003/2006 claims.

On nearly all measures examined in the study, Wisconsin was lower than typical. An exception was that medical costs per claim with more than seven days of lost time were fairly typical for 2003/2006 claims. According to another WCRI study, Wisconsin had the highest average prices paid among the study states, but this was offset by lower utilization of medical services.

Several factors played a significant role in the lower cost per claim in Wisconsin, including faster return to work; much lower permanent partial disability (PPD)/lump-sum payments per claim; and among the lowest expenses per claim for delivering indemnity and medical benefits to injured workers.

The average indemnity benefit per claim with more than seven days of lost time in Wisconsin grew by nearly 9 percent in 2005/2006, following little change in the prior year.

This was due to small changes in a number of factors according to WCRI: an increase in the average duration of temporary disability; growth in the average weekly wage; an increase in the average permanent partial disability (PPD)/lump-sum payment per PPD/lump-sum claim; and a moderate increase in the frequency of PPD/lump-sum claims.

Benefit delivery expenses per claim with more than seven days of lost time and expenses rose 15 percent in 2005/2006, driven mainly by medical cost containment expenses.

Medical cost containment expenses per claim increased 21 percent in 2005/2006. Although growing at a rapid rate, the average medical cost containment expense per claim with expenses in Wisconsin was still the lowest of the 14 study states at all claim maturities, WCRI noted.

WCRI reported that Wisconsin was among the fastest of the study states in terms of timeliness of first indemnity payment. Fifty-three percent of injured workers in Wisconsin were issued their first checks within 21 days of injury, compared to the 14-state median of 41 percent. Faster payments may have been influenced by the state agency’s efforts to monitor timely payments and to provide payors with feedback about their performance.

Louisiana Notes Storm Mitigation Incentives

Insurance premium discounts are available in 2008 to Louisiana homeowners who build or retrofit a structure to comply with the requirements of the State Uniform Construction Code, install damage mitigation improvements, or retrofit their property utilizing construction techniques demonstrated to reduce the amount of loss from a windstorm or hurricane. Act 323 of the 2007 Regular Session provides these discounts for insureds effective after insurers file rates to include the discounts with the Louisiana Department of Insurance between March 31, 2008 and Jan. 1, 2009.

Premium discounts are granted based on damage mitigation improvements and construction techniques listed on the Louisiana Hurricane Loss Mitigation Form. Homeowners should contact their insurance company or agent for more information. These damage mitigation improvements and construction techniques include but are not limited to: buildings designed to code; roof bracing; secondary water barriers; opening protection; roof-to-wall strength; roof deck attachment; roof covering and roof covering performance; wall-to-floor-to-foundation strength; window, door, and skylight strength; and other mitigation improvements and/or construction techniques that the insurer has determined to reduce the risk of loss due to wind.

Inspection and certification must be performed by a building code enforcement officer, registered architect or engineer, or a registered third-party provider authorized by the Louisiana State Uniform Construction Code Council to perform building inspections. Proof of eligibility for premium discounts must be provided by the insured. The insurer may require completion of the Louisiana Hurricane Loss Mitigation Form or other documentation to demonstrate compliance with the State Uniform Construction Code, such as permits, certificates of occupancy, inspection reports or receipts. If deemed necessary, the insurer may also perform its own independent inspection. 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.

Another storm mitigation incentive made available in the 2007 Regular Session by Act 467 is state income tax deductions for insureds who voluntarily retrofit an existing residential structure to bring it into compliance with the State Uniform Construction Code. This construction code retrofitting deduction is an amount equal to 50 percent of the cost paid or incurred for the retrofit on or after January 1, 2007, less the value of any other state, municipal or federally-sponsored financial incentives for the cost paid. The taxpayer must claim the homestead exemption for the home being retrofitted and the home cannot be rental property. The tax credit can be no more than $5,000 per retrofitted residential structure and is claimed on the tax return for the year in which the work is completed.

A third storm mitigation incentive made available in the 2007 Regular Session by Act 462 allows insureds to receive exclusions on state sales and use tax when purchasing storm shutter devices that provide window damage protection in a storm or hurricane, effective July 1, 2007.

N.Y. Crane Collapse Shows Few Renters Have Coverage

Only two of 32 renters interviewed by the New York State Insurance Department following last month’s crane collapse on New York City’s East Side were protected by tenants insurance. That low number is hardly surprising. Nationally, a 2006 survey by the Insurance Research Council found that only 43 percent of all renters were insured. In New York City, that percentage is believed to be significantly lower because of the high cost of living. “Renters insurance is typically inexpensive and provides valuable protection when the contents of a renter’s apartment are damaged or stolen. This type of insurance may even protect a renter from liability when another person is injured while in the renter’s home,” said Insurance Superintendent Eric Dinallo. Tenants insurance protects against losses caused by such events as fires, lightning strikes, windstorms or incidents of vandalism or theft. Even water damage from a building’s plumbing is usually covered. In some cases, the insurance will reimburse an insured individual for some of the added expenses incurred when a person is forced out of a rental property damaged by an event such as a fire.

Mitchell International, Fair Isaac Corp. Note Deal

Mitchell International Inc., a provider of information, workflow, and performance management solutions to the property and casualty claims and collision repair industries, has entered into an agreement to acquire the workers' compensation medical cost containment business of Fair Isaac Corporation. Fair Isaac has been a leader in the market in medical cost containment technology and services to the workers' comp industry through this strategic business unit by providing a comprehensive suite of medical bill review solutions including its flagship technology solution Smart Advisor(TM) and its extensive portfolio of outsource and medical professional review offerings. Through product offerings such as its Decision Point(TM) medical bill review and ClaimIQ(TM) decision support solutions, Mitchell Medical, the company's casualty solutions division, currently offers a broad set of cost containment technology and service solutions to the auto casualty claims market.

The Midland Co., Munich Re Group Complete Deal

The Midland Company, a provider of specialty insurance products and services, has completed the merger in which Midland has been acquired by Munich-American Holding Corporation, a subsidiary of Munich Re. Prior to the closing of the merger, Midland completed the previously announced sale of all of the shares of capital stock of M/G Transport Services Inc. and MGT Services Inc. to an affiliate of Brooklyn NY Holdings LLC. Under terms of the merger agreement, Midland shareholders will receive $65.00 per share in cash. Holders of Midland common stock who hold uncertificated book-entry shares may expect to receive the merger consideration within approximately seven business days. Holders who hold their shares through Depository Trust Company should contact their broker or other financial advisor for instructions. Holders of certificated shares of Midland common stock will receive a letter of transmittal and other materials from our paying agent. These materials will have to be completed and returned to the paying agent in order for such shareholders to receive the merger consideration. At the close of business today, Midland shares will be de-listed from the Nasdaq Global Select Market and will cease to trade on that market.

Texas Department Issues C&D Order

The Texas Department of Insurance (TDI) has issued an emergency cease and desist order against Gary Garza of Corpus Christi, Texas to prevent him from submitting windstorm inspection reports under false pretenses. Garza, who is reportedly not a licensed engineer and has not been appointed by the Commissioner of Insurance as a qualified inspector, allegedly acquired the signature and seal of a qualified inspector and submitted fabricated inspection forms to TDI. According to the TDI order, Garza’s conduct is illegal, hazardous, and creates a danger to public safety. A windstorm insurance inspection for wind and hail coverage through the Texas Windstorm Insurance Association (TWIA), must be conducted by either a TDI inspector or an engineer who has been appointed by the TDI Commissioner. While not required for all construction, a windstorm insurance inspection is typically required for new structures, additions, alterations, re-roofs and repairs. Windstorm inspections are conducted at various stages of the building, renovation or repair process, prior to the completion of construction. A complete list of appointed engineers is available on the TDI Web site at: http://www.tdi.state.tx.us/wind/engaprv.html

Aon Re Study Takes Aim at Hurricane Analysis

As leading hurricane season forecasting organizations begin issuing updated tropical season forecasts for the 2008 Atlantic Hurricane Season, an analysis by Impact Forecasting LLC, a unit of Aon Re Global, found seasonal outlooks for individual years are generally less accurate than when those individual forecasts are measured cumulatively against actual hurricane activity over periods of five years or longer. According to Impact Forecasting's analysis, tropical season predictions released in May 2007 and 2006 by top hurricane researchers at Colorado State University (CSU), the National Oceanic and Atmospheric Administration (NOAA) and Tropical Storm Risk (TSR) overestimated the number of hurricanes and major hurricanes (hurricanes that achieve or exceed Category 3 status on the Saffir-Simpson Scale) that ultimately would form in the Atlantic and Caribbean oceans. The discrepancies between forecasted activity and actual activity have been attributed to the unanticipated levels of dust and dry air that settled across the region of the Atlantic Ocean where tropical systems and hurricanes tend to develop. When analyzing five years of forecasts for named storms, hurricanes and major hurricanes, Impact Forecasting found the forecasts have been quite accurate when compared to average season values. The analysis, contained within Aon Re Global's 2007 Annual Global Climate and Catastrophe Report, utilized May forecasts for the Atlantic Hurricane Season issued by Colorado State University, the National Oceanic and Atmospheric Administration and TropicalStormRisk.com since 2003. These forecasts were compared to what occurred across the Atlantic and Caribbean basins during single years and within a five-year period. The Aon Re Global 2007 Annual Global Climate and Catastrophe Report is available for download at: http://aon.mediaroom.com/index.php?s=63&item=191.

Fireman's Fund Adds More Yacht, Watercraft Coverage

Fireman's Fund Insurance Company is offering enhanced coverages for yachts to protect against uninsured/underinsured vessels, vermin damage, contents onboard and an electronics deductible. This addition reportedly positions Fireman’s Fund’s as a market leader with its Prestige Yacht^SM and Watercraft policies. Fireman’s Fund also announced a lower electronics deductible, expanded coral reef and sea grass coverage, and protection in case of total loss resulting from vermin damage. Vermin damage is reportedly of particular concern in the Pacific Northwest, where muskrats and otters have been known to chew through exposed rubber portions of engine exhausts. Other additions to Fireman’s Fund’s coverage include protection against damage to mopeds, scooters, passports, and other necessary forms of identification while they are onboard. This is a complement to the existing policies that already feature agreed value (to protect against depreciation), coverage for captain and crew under Admiralty Law including the Jones Act, protection against pollution fines up to $25,000 including “sudden and accidental” events, and a broad definition of personal effects. For further information, visit firemansfund.com.

RenaissanceRe Holdings Purchases CMS

RenaissanceRe Holdings Ltd. announced that its indirect wholly-owned subsidiary, Glencoe Group Claims Management Inc., has acquired the assets of Claims Management Services Inc. (CMS), a privately-held provider of claims administration, adjustment and consulting services. Based in Roswell, Ga., CMS has provided third party administrative services to the insurance company subsidiaries of Glencoe Group Holdings Ltd., RenaissanceRe’s Individual Risk unit, on an outsourced basis since 2005. Terms of the transaction were not disclosed. As a result of the transaction, approximately 50 CMS employees have joined the Glencoe Group. Companies in the Glencoe Group comprise RenaissanceRe’s individual risk underwriting operations, and include Glencoe Insurance Ltd., Lantana Insurance Ltd., Stonington Insurance Company and Stonington Lloyds Insurance Company. For more information, visit www.glengrp.com.

Argo Group Bids to Acquire Heritage Underwriting

Argo Group International Holdings Ltd.,, an international underwriter of specialty insurance and reinsurance products in niche areas of the property and casualty market, announced an offer to acquire Heritage Underwriting Agency Plc, a Lloyd's insurer. The strategic combination of Argo and Heritage will reportedly create a broader underwriting platform, with increased market presence, as well as an extended geographic capability and distribution network. Subject to relevant legal and regulatory requirements and to satisfaction of customary conditions for a transaction of this type, the deal is expected to close within three months. Argo intends the Heritage management team to remain in place.

Arrests Made in California Auto Scam

California Insurance Commissioner Steve Poizner announced the arrests of three individuals allegedly involved in a five-person conspiracy that resulted in a vehicle owned by one of the conspirators driven to Mexico where it was "chopped" (i.e., taken apart so that its parts can be used or sold separately). On March 25, 2008, Ninfa Patricia Ramos-Ortiz, 44, of Hawaiian Gardens was arrested on three felony insurance fraud charges. On March 26, 2008, Ana Laura Salgado-Antunez (aka Ana Laura Salgado or Ana Laura Antunez), 26, of Santa Ana was arrested on five felony insurance fraud charges. And on March 27, 2008, Ramos-Ortiz's son, Julio Edder Ramos-Alarcon (aka Julio Ramos Alarcon, Julio Edder Ramos, or Julio Edder Alarcon), 25, also of Hawaiian Gardens was arrested on six felony insurance fraud charges.

Each felony insurance fraud charge is punishable by up to five years in prison and/or a $50,000 fine.

Arrest warrants for multiple insurance fraud felonies are still outstanding for:

• Diana Maldonado Cruz, 38, of Tijauna, Mexico
  
• Juan Diego Cartagena-Alarcon, 31, of Tijauna, Mexico
  

Allegedly, Salgado-Antunez last saw her 2006 Nissan Armada on July 19, 2007, when she parked it at Ramos-Ortiz's residence. Salgado-Antunez stated that she and Ramos-Alarcon discovered the vehicle was missing the next morning. Salgado-Antunez subsequently contacted the local police department and filed a theft report. She also reported the vehicle stolen to her insurer, Mercury Insurance Company. During the claims handling process, Mercury learned that Salgado-Antunez and Ramos-Alarcon allegedly paid a couple of his friends to take the vehicle to Mexico on July 16, 2007, three days before the reported theft. Mercury subsequently referred the case to the California Department of Insurance's Fraud Division (CDI).

The criminal investigation conducted by CDI and the California Highway Patrol further revealed that Salgado-Antunez, the primary driver, was behind on her payments and the vehicle was not running properly. She and Ramos-Alarcon reportedly believed that they could no longer afford to keep the vehicle, so they paid an individual a sum of money to drive it to Mexico to dispose of it. This individual did so accompanied by Cruz and several other people. Once in Mexico, the vehicle was turned over to Cruz, who then reportedly delivered the vehicle to her partner, Cartagena-Alarcon, to be "chopped." Salgado-Antunez, Ramos-Alarcon, and Ramos-Ortiz all falsely reported seeing the vehicle in Ramos-Ortiz's driveway on a date when, in fact, the vehicle was already in Mexico.

Although no money was paid on the claim because Mercury learned of the alleged conspiracy, the potential loss was in excess of $27,000.

The Navigators Group Offers Tech Policy

The Navigators Group Inc. announced that Navigators Pro, a division of Navigators Management Company, has introduced the Tech InNAVation(sm) Information Technology Professional Liability policy for information technology services, software, Internet consulting, technology development and web design firms. Tech InNAVation(sm) provides coverage for technology firms and their partners, directors, officers, employees and independent contractors who are legally obligated to pay covered losses resulting from rendering or failing to perform their duties. A broad definition of Cyber and Technology Services includes system or network analysis, programming, consulting, marketing, designing, electronic and computer-based services. The policy is specifically designed for technology service providers with revenues up to $150,000,000. Limits of liability up to $10,000,000 are available for select insureds based upon underwriting evaluation. Tech InNAVation(sm) is underwritten by Navigators Insurance Company and Navigators Specialty Insurance Company, which are both rated "A" (Excellent) by A.M. Best. The Tech InNAVation(sm) policy is limited to eligible risks subject to Navigators' underwriting evaluation. Customers should consult their insurance broker for underwriting requirements and eligibility, and review the policy for actual coverage, limitations, restrictions, exclusions, terms and conditions.

Travelers Unveils Wrap+ for Canadian Companies

Travelers is introducing Canadian private companies and non-profit organizations to Wrap+, a management liability policy with comprehensive coverage and flexible options. The scaleable, customized Wrap+ policy suite of coverages is comprised of liability (directors and officers, employment practices, fiduciary and miscellaneous professional), crime, kidnap and ransom and identity fraud expense reimbursement. Wrap+ policyholders may purchase the specific coverage they need now, and add more coverage – seamlessly – as their businesses or organizations grow. Wrap+ is tailored to meet the unique needs of Canadian non-profits and private companies. While a single coverage may satisfy a business’ initial needs, other coverage may be added upon renewal or mid-term as exposures emerge, to create a single, cohesive policy suite. Consistent policy language, terms and conditions within this progressive policy reportedly minimizes gaps and overlaps. A common declarations page for all coverage makes Wrap+ reportedly easy to manage. Wrap+ customers receive local services as well as local claims handling. Wrap+ is currently available from independent brokers located throughout Canada. For more information regarding this product and other products offered by Travelers in Canada, visit www.travelerscanada.ca.

N.Y. Restaurant Owner Charged in Food Scam

The owner of the Golden Fox Restaurant and Bar in Troy, New York was charged with grand larceny after he was arrested last Thursday for filing an allegedly false insurance claim over the loss of $7,000 worth of food in a power outage. Joseph R. Greco, 55, Albany, was arrested by New York State Insurance Department Frauds Bureau Investigator David Towne, assisted by State Police at Loudonville. Greco's arrest followed the investigation of an insurance claim in which he said he lost food products because of a power outage that affected his restaurant at 254 Broadway. Greco was paid $5,000 after filing the claim with Selective Insurance and National Grid Power Company. The investigation determined that he did not lose any food because of the July 2007 power outage. If convicted, Greco could be sentenced to up to seven years in prison. Following his arraignment in Troy City Police Court, Greco was released to the supervision of probation, pending an April 29 hearing.