The validation of voluntary benefits as a mainstream distribution system has been proven in the marketplace.Year after year of impressive growth and increased acceptance by both employers and employees has created an environment for carriers and producers to capitalize on this expanding market. www.workplacebenefits.org Daily Quote: "We will not know unless we begin." - - Howard Zinn
1. Nevada Insurance Commissioner Offers Assistance to Fernley Residents January 11, 2008 CARSON CITY – Nevada Insurance Commissioner Alice A. Molasky-Arman is urging Fernley residents stricken by the levee break to file a claim report with their insurance company. A claim report should be filed regardless of whether the consumers believe they have coverage. Molasky-Arman has contacted insurers to remind them of their obligations and statutory responsibilities to their policyholders under an insurance contract. She stated, “Insurance companies are required to fully inspect any damaged property before a coverage decision is made. Additionally, insurers must provide their insureds with a reasonable and written explanation, which cites specific language in the policy to justify the reasons for denying a claim.” Molasky-Arman clarified that flood insurance – not standard homeowners insurance – typically covers water damage due to flood. Exclusions in homeowner policies are not identical. They may vary among insurers or even the time of issuance of coverage. Molasky-Arman strongly encourages consumers to review their policy language for water damage exclusions due to flood. Among other issues, the question of whether certain flood exclusionary language in some homeowner insurance policies is sufficient to deny coverage still remains in litigation in the aftermath of the Hurricane Katrina disaster. When addressing insurance coverage with their agent, consumers should ask the agent to fully explain any exclusions related to flood and water damage. They should also ask about any determinations concerning related concurrent causes of loss, such as rain, wind and weight of ice or snow, which may be covered by their policy, irrespective of other damage that may be excluded from coverage. Consumers should also be aware that if they purchased automobile comprehensive insurance coverage, damage to their vehicle caused by the weather, including flood, is covered. The Division is unaware of any limitations or exclusions in type of coverage that would negatively impact claims for damaged vehicles. Molasky-Arman cautions that, in the event a claim that was originally denied becomes an accepted claim, homeowners will be required to reimburse the financial assistance or funding received from the Federal Emergency Management Agency (FEMA) not to exceed their claim settlement. Commissioner Molasky-Arman encourages consumers to call her office in Carson City at (775) 687-4270 if their agent or insurer refuses to receive their claim. They may also reach the Division by e-mail at insinfo@doi.state.nv.us. Consumers may wish to consider the purchase of flood insurance as a worthwhile option. You do not need to live in a flood zone to purchase flood insurance. Flood insurance, backed by FEMA’s National Flood Insurance Program, provides homeowners, business owners and renters with the best protection available against flooding. According to FEMA, flood insurance covers buildings and contents. Some private insurers also offer separate endorsements to homeowners policies that provide flood insurance. http://doi.state.nv.us. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Fourth Quarter RIMS Benchmark Survey™ Results Report Soft Commercial Lines Insurance Market Gains Momentum Sharply falling D&O liability average premiums lead market down NEW YORK, N.Y., January 11, 2008—Commercial lines insurance premiums continued to tumble during the fourth quarter of 2007, according to the RIMS Benchmark Survey™, the industry’s leading survey of policy renewal prices as reported by corporate risk managers. Despite concerns about losses arising from the continuing crisis in the subprime mortgage market, the average directors and officers liability (D&O) premium fell 11 percent in the fourth quarter, far outstripping decreases in other lines of business tracked by Advisen for the RIMS Benchmark Survey™. While posting more modest decreases, the persistent soft market continued to wear away at pricing in general liability (-3.0 percent) and property (-1.3 percent). After falling sharply in 2006, due largely to reform measures in several large states, workers compensation premiums continued the more moderate trend seen throughout 2007. The average workers compensation premium fell 1.4 percent during the quarter. “Overall, 2007 was a good year for risk managers—certainly as it relates to the cost of insurance,” says John R. Phelps, ARM, CPCU, member of RIMS Board of Directors and director of business risk solutions for Blue Cross and Blue Shield of Florida, Inc. “The downward pricing momentum in the fourth quarter, especially in D&O, suggests that the soft market still hasn’t hit bottom.” “Insurance companies are still posting very good results and probably will end the year with an underwriting profit,” says David Bradford, editor-in-chief of Advisen. “That should further stimulate competition and buyers can look forward to yet lower insurance costs. But the soft market will eventually take its toll on insurer earnings—maybe starting as early as the second quarter of 2008.” www.RIMS.org www.advisen.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Tort Trends Likely To Remain Stable In 2008, Finds I.I.I. Survey Of Insurance Industry Leaders NEW YORK, January 14, 2008 — Tort trends will likely remain stable in the year ahead, according to a survey conducted by the Insurance Information Institute (I.I.I.) at its 12th annual Property/Casualty Insurance Joint Industry Forum, held here. Sixty-six percent of the executives polled believe that tort trends in 2008 will be little changed from 2007. However, 28 percent believe tort trends will deteriorate. Just 6 percent of those polled indicated that tort trends would improve. Nonetheless, respondents were very confident about wind versus water litigation. Eighty-percent of respondents indicated that wind versus water litigation was largely resolved in favor of the insurance industry. When it comes to whether Congress will adopt a National Catastrophe Insurance Plan in 2008, 90 percent of respondents do not think it will occur. In addition, 70 percent of insurance leaders think the push for an Optional Federal Charter will not gain momentum on Capitol Hill in the year ahead. Looking at the industry’s financial performance, a majority of industry leaders believes the market will continue to soften in most property/casualty lines. Broken down by line of insurance, only 24 percent of respondents believe profitability will improve in personal auto and homeowners insurance, 22 percent expect improvement in workers compensation. Overall, just 20 percent of respondents expect an improvement in commercial lines profitability in 2008. Looking at consolidation, 80 percent of respondents thought there would be an increase both among insurers and reinsurers in 2008. “Soft market conditions and the accumulation of excess capital have historically been catalysts for increased merger and acquisition activity in the property/casualty insurance industry,” said Dr. Robert Hartwig, president of the Insurance Information Institute. Hartwig added that the last peak in merger and acquisition activity occurred in 1998 when the industry’s ratio of premiums written to policyholder surplus fell to $0.84:$1, just two cents lower than the $0.86:$1 ratio record during the third quarter of 2007. On the investment side, 54 percent of industry leaders expect the equity markets to have a down year. The majority of insurance leaders—56 percent—expect interest rates to fall in 2008, while 28 percent believe rates will remain flat. On the political front, 72 percent of CEOs thought that the Democratic Party would win the White House in 2008. www.iii.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Public Hearing Before California Department Of Insurance Begins Tomorrow In San Francisco Over Allstate Rate Hike Application - FTCR Will Challenge Allstate's Request To Hike Homeowners Insurance Rates Allstate Wants to Overcharge Homeowners $336 Each, Says The FTCR Which is Challenging $325 Million Windfall for Insurance Giant WHAT: A public hearing before the California Department of Insurance will begin on Monday, January 14, 2008 at 9:00 AM in San Francisco, CA. before Chief Administrative Law Judge Marjorie Rasmussen at which Allstate Insurance Company [NSYE: ALL] is seeking approval of its proposal to allow a 9.3% rate hike on its homeowners insurance customers. The FTCR (Foundation for Taxpayer and Consumer Rights) has challenged Allstate's rate hike. At the hearing, the FTCR will present evidence that Allstate is already gouging its California customers and that Allstate should be required to lower its rates by approximately thirty percent (30%). The hearing is expected to last 2-3 days. In the Matter of the Rate Application of, Allstate Insurance Company and Allstate Indemnity Company, File No. PA-2006-00006. WHO: The FTCR is a nonprofit organization which has challenged Allstate's proposals under the rules of the voter-approved insurance reform measure Proposition 103. The FTCR is represented by its Litigation Director, Pamela Pressley and its outside counsel, Daniel Y. Zohar with the Los Angeles, CA. Zohar Law Firm. If the FTCR prevails, consumers will pay about $325 million less than the company wants, for an average savings of about $336 per Allstate homeowners insurance policyholder. "Under Proposition 103, Allstate is required to prove its need for more policyholder cash," explained Daniel Y. Zohar. "Allstate's claim of financial hardship in the face of its profitability just doesn't add up. On behalf of California consumers, we will argue that Allstate's rate hike should fail." WHEN: MONDAY, JANUARY 14, 2008 AT 9:00 AM WHERE: California Department of Insurance 45 Fremont Street, 22nd Floor San Francisco, CA. 94105 PRESS CONTACT: Mark Reback at the FTCR Tel: 310.392.0522, extension 326 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. 2007 Another Profitable Year, But Long-Term Focus Key Insurance Execs Say Catastrophes Remain the Wild Card, Amid Concerns about Homeowners Line NEW YORK, January 11, 2008 — Despite two consecutive years of underwriting profitability, the insurance industry should guard against complacency, said chief executive officers (CEOs) participating in the View from the Inside Looking Out, a panel discussion at the 12th annual Property/Casualty Joint Industry Forum. “2007 is a terrific year following on 2006,” said Ramani Ayer, chairman & CEO, The Hartford. But, he cautioned, “You really are looking at two good years, over a period of anemic years, so it’s not like the industry has returned to its shareholders at outstanding levels over a sustained period of time.” “To look at two good years and start to pat yourself on the back and say we have done a terrific job as an industry is a sentiment that probably our shareholders wouldn’t agree with. We need longer, extended periods of profitability,” added Ayer. Moderated by Frank Nutter, president, Reinsurance Association of America, the session offered insights into the way insurance company CEOs are viewing the P/C industry’s 2007 underwriting profit and a look ahead at 2008. Evan Greenberg, chairman, president & CEO, ACE Limited, noted that a number of things went right in 2007, including relatively light catastrophes and favorable prior period recognition, but he predicted 2008 would be a more marginal year. “Next year I think combined ratios are going to be markedly under pressure versus this year. You see the rate deterioration that is occurring,” he said. CEO panelists agreed that they expect 2008 to be another profitable underwriting year, barring major catastrophes, but not necessarily across all lines of business. “It depends on where you play. Certain lines will perform better than others, but it is not across the board like it was a few years ago,” said Anthony Kuczinski, CEO, Munich Re America. Focusing on personal lines, Tom Wilson, president and CEO, the Allstate Corporation, noted that it’s not all about price. “In the auto business, people have been investing in product, technology, marketing and service. This raises the value of the product to the consumer and in our experience the consumer is prepared to pay for that.” Catastrophe risk remains a major factor for personal lines insurers, however. “The wildcard has always been catastrophes and will there be another series of storms. Whether it’s four in one year, or three big ones in one year, it hasn’t been so long that we’ve forgotten,” Wilson said. In a wide ranging discussion, CEOs covered a range of topics including slowing premium growth, mergers and acquisitions, the subprime crisis, and homeowners insurance. They voiced concern about homeowners insurance, describing it as a troubled line of business in coastal zones where the ability to charge a premium commensurate with the risk is a key challenge. Nutter cited an Aon study showing that the return on equity (ROE) for homeowners nationwide was just 7 percent and that to achieve a 14 percent ROE where the industry is overall, would require rate increases of 23 percent. “Another way to ask that question is would you pay another $150 to protect your most valuable asset that makes up one-third of your net worth? Most people wouldn’t, most people spend more than that at Starbucks in a year,” Wilson said. Gerald Schmidt, president & CEO, Mutual of Enumclaw noted that the 10-year return on net worth in the homeowners line across the U.S. is 2.8 percent. “That speaks volumes relative to the average annual profitability of that line of business.” “There is a collision of interests. The intersection where that collision occurs is the unreasonable expectations of homeowners relative to the cost and price of the product, and the desire for insurers to have an adequate rate of return. Currently we are losing that battle in the court of public opinion,” he said. www.iii.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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INSURANCE NEWSCAST... For more information or to have a media kit e-mailed to you, call Tedd Isham at 888.282.1765, send an e-mail to tedd@insurancebroadcasting.com, or visit www.insurancebroadcasting.com. 6. Citigroup could write down up to $24 billion: report Mon Jan 14, 2008 11:35am NEW YORK (Reuters) - Citigroup Inc. could make as much as $24 billion in writedowns and lay off 20,000 workers as part of a plan to cut costs and boost capital, CNBC said on its Website in a report dated Sunday. The report said the plans will be unveiled on Tuesday, when it reports its fourth-quarter results. Citigroup is widely expected to report a quarterly loss and announce big lay-offs as it looks to cut costs in a tough business environment. Many analysts believe Citi will also look to suspend or cut its dividend in a bid to save $10 billion cash a year. (Reporting by Ritsuko Ando, editing by Will Waterman) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Citigroup may cut thousands of jobs: report Mon Jan 14, 2008 1:28pm EST NEW YORK (Reuters) - Citigroup Inc (C.N: ), the largest U.S. bank, may eliminate 17,000 to 24,000 jobs and write off as much as $24 billion for subprime and other credit losses, as part of a plan to cut costs and add capital, CNBC television said on Monday. The write-down and job cuts may be announced on Tuesday, CNBC said, when Citigroup is widely expected to report the largest quarterly loss in its history. Analysts on average expect the loss to be about $5 billion, according to Reuters Estimates. Further job cuts at Citigroup might take place over the next year, CNBC said. They would be on top of 17,000 cuts announced in April, when Citigroup employed about 327,000 people. (Reporting by Jonathan Stempel, Additional reporting by Christian Plumb; Editing by Leslie Gevirtz) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Rating agencies defend role in subprime crisis Mon Jan 14, 2008 1:43pm STRASBOURG, France, Jan 14 (Reuters) - Credit rating agencies defended their role on Monday in the credit squeeze that began in August, saying some investors expected too much from their ratings. "We recognise some investor had been using ratings inappropriately," Barbara Ridpath, head of ratings services at Standard & Poor's, told the European Parliament. "Some investors did not fully appreciate that rating agencies only cover credit risk," Ridpath said. Credit rating agencies have been criticised by France, Germany and the European Commission for being too slow to warn investors of the risks of buying U.S. subprime-related products. Frederic Drevon of Moody's, a rival credit rating agency, told the EU assembly's economic affairs committee, there were no calls from users for a separate rating system for structured products, found at the heart of the recent subprime related credit squeeze. (Reporting by Huw Jones, editing by Marcin Grajewski) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Bermuda bond insurers take aim as MBIA, Ambac falter Fri Jan 11, 2008 12:54pm By Walden Siew and Lilla Zuill - Analysis NEW YORK/HAMILTON, Bermuda (Reuters) - As bond insurer titans MBIA Inc (MBI.N: ) and Ambac Financial Group (ABK.N: ) falter, smaller players in Bermuda, 700 miles off the U.S. seaboard are looking to take center stage. The 21-square mile British territory is home to Assured Guaranty and CIFG, two of the biggest potential winners as rivals MBIA and Ambac, the world's two biggest bond insurers, suffer due to exposure to bad U.S. subprime mortgages and risky debt. Along with No. 3 bond insurer FSA, based in New York, Assured and CIFG are expanding as competitors struggle to maintain their investment-grade "AAA" ratings. "This is their opportunity to muscle in when the dominant players are ailing," says Rob Haines, senior insurance analyst at CreditSights Inc. in New York. Along Bermudiana Road in Hamilton, known locally as "Insurance Row," pricey champagne and lavishly catered parties are still in high demand. Companies like Assured Guaranty are on the move, this week opening a new office in Sydney to expand its business in Australia and Asia. The firm's other greatest growth areas are in Britain, Spain and Italy, Assured CEO Dominic Frederico said in an interview. "We see international operations as a great growth opportunity in Europe, Australia and Asia," Frederico said. "We could be No. 2 or No. 3 in terms of U.S. public finance deals. We should be able to grab a fair share of the market." BIGGER FISH Smaller Bermuda bond insurers are not the only players smelling an opportunity. Billionaire investor Warren Buffett kicked off the new year by unveiling Berkshire Hathaway Inc.'s (BRKa.N: ) (BRKb.N: ) new bond insurance arm, Berkshire Hathaway Assurance Corp., is the latest player in the $2.5 trillion U.S. municipal bond market. Buffett's new company on Wednesday made its first deal by insuring $10 million of outstanding New York City debt. "Warren Buffett's recent entry into these markets underscores the continued value of financial guarantee insurance," said John Pizzarelli, the chief executive of CIFG who has inside knowledge of rival MBIA, where he worked for two decades before joining CIFG. Bermuda's CIFG also has benefited from a $1.5 billion capital injection from shareholders of its French parent company Natixis (CNAT.PA: ). While Assured's Frederico agreed with CIFG's assessment of Buffett, he cautioned: "You are talking about the 800-pound gorilla. That's a name that's highly respected, has a connotation of financial strength and consistency, so they would be formidable." Cracks in the $2.5 trillion bond insurance market, and declining property insurance rates, have yet to hit Bermuda in the most tangible way -- a tightening of purse strings. Over the year-end holidays, Brian O'Hara, chief executive of XL Capital, majority owner of No. 5 bond insurer SCA's XL Capital Assurance, dined at the Little Venice Restaurant's sun-decked front terrace with Henry Keeling, XL's chief operations officer, who is often cited as a candidate for the CEO job when O'Hara retires this year. Once a tourism mecca, the island now counts far more business than leisure travelers, who get to work and play in a sub-tropical paradise dotted with golf courses, pink sand beaches and growing office and luxury condominium developments. On the westernmost flank of Hamilton, the island's capital, Bermuda bond insurers are banking on more visitors to come. © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. MBIA Says CDO-Squared Risk Now $9 Bln, Was $8.1 Bln Fri Jan 11, 2008 1:01pm By Walden Siew NEW YORK (Reuters) - MBIA Inc. (MBI.N: ), the world's largest bond insurer, said it has $9 billion of exposure to the riskiest mortgage debt, $900 million more than the company disclosed about three weeks ago. The company, in a public filing on Jan. 9, said it had guaranteed $30.6 billion of complex securities known as collateralized debt obligations. Of those securities, MBIA said it has $9 billion of exposure to the riskiest structures known as CDOs of CDOs, or CDO squared. About 70 percent of the collateral of the CDO squared structures are rated triple-A, the highest grade. MBIA said 41 percent of the securities were originated in 2005 or before. Last month the company said it insured $8.1 billion of CDO squared debt, surprising investors and sparking the biggest one-day decline of MBIA's shares. MBIA also said it now has $45.2 billion of exposure to overall residential mortgage-backed securities, which comprises 7 percent of MBIA's insured portfolio, as of Sept. 30, 2007. Spokespersons for MBIA didn't return phone calls seeking comment. (Editing by Leslie Adler) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
11. RAA Comments On The Consumer Federation Of America’s Study “Insurers Maintain Record Profits’ WASHINGTON, DC (January 11, 2008) – Franklin W. Nutter, President of the Reinsurance Association of America (RAA), today responded to the release of a study by the Consumer Federation of America entitled “Insurers Maintain Record Profits” highlighted the report's comment that "in recent years, insurers have reduced their financial risk by the wise use of reinsurance". The benchmark for this accurate observation Nutter observed is that, in contrast to the reports themes, reinsurers have made extraordinary financial contributions in response to the most significant series of catastrophic events in US history. Nutter noted, "Since 2000 reinsurers have paid roughly $20 billion for 9/11 claims, $3 billion in claims for the 2004 hurricane season and $27 billion in claims for Hurricane Katrina, Rita and Wilma in 2005. Reinsurers did not make an underwriting profit in the US for over 20 years until 2006 and 2007 when no major hurricanes hit US soil." In 2001 reinsurers paid $1.40 in claims and expenses for every dollar of premium. In 2005 US reinsurers paid $1.26 in claims and expenses for every dollar of premium. "It is curious", Nutter noted, "that the CFA report would recommend more state government reinsurance funds, like Florida's, yet soundly criticize government and taxpayer backed subsidies for insurers upon which the Florida fund is based. What is the logic of more state taxpayer funded reinsurance to insurers in the context of criticizing insurer profits?" Calls for "actuarially" sound state reinsurance, per the report, defy experience and political logic, Nutter commented on the CFA report. Pointing to broker reports for the January 1st reinsurance renewals that highlight abundant reinsurance capacity for catastrophe risk, dropping rates and a "buyer's market", the CFA is correct about one thing: the reinsurance market wants to write catastrophe risk. "Encourage it; don't displace it with expanded taxpayer subsidies to insurers through state reinsurance programs" noted Nutter. Reinsurance Association of America Barbara W. Carroll 202-783-8390 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. 2007: A VERY GOOD YEAR FOR LIFE Nonprofit LIFE Foundation Begins 2008 with Company Contributions Up, Record Level Membership, and New Board Appointments Arlington, VA – January 11, 2008 – The start of 2008 brings to a close what was a very good year for the nonprofit Life and Health Insurance Foundation for Education (LIFE). In 2007, the organization’s membership reached a record high and company contributions were up for the third straight year—contributions have increased 27 percent since the close of 2004. “More companies recognize that supporting the LIFE Foundation is an effective way to ensure that important educational messages about insurance reach the millions of Americans who lack sufficient coverage,” said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. LIFE’s Company Membership Continues to Rise In 2007, LIFE added a number of prominent insurance companies and other financial services organizations to its membership roster, including: AIG/American General, ING, Anthem Life, Equitable Reserve Association, HSBC Insurance Services, Knights of Columbus, Marsh Affinity Group Services, National Life of Vermont, Physicians Mutual Life, Slovene National Benefit Society, United Heritage Mutual Life Insurance Co., and Western Fraternal Life. These new members join a long list of LIFE member companies that already includes such industry leaders as State Farm, AEGON, New York Life, Penn Mutual, Guardian, MassMutual, John Hancock, AXA Equitable, Principal Financial Group, Southern Farm Bureau, COUNTRY Insurance & Financial Services, Farm Bureau Financial Services, Nationwide, Prudential, Allianz, Allstate, UNIFI, The Hartford, Genworth Financial and Thrivent Financial. www.lifehappens.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. NEW EXPERT COMMENTARY FROM IRMI.COM There are now over 1,000 risk management and insurance articles on IRMI.com. Below you'll find summaries of some recent additions with links to the articles. AGE DISCRIMINATION LEGAL UPDATE - Paul Siegel relates four recent court cases dealing with age discrimination issues, and tells how the various jurisdictions hold. http://www.irmi.com/Expert/Articles/2007/Siegel12.aspx DEMYSTIFYING PROPERTY INSURANCE APPRAISALS - Jay Levin examines methods appraisers, umpires, and parties use to make the process proceed more smoothly and maximize the likelihood of a fair award. http://www.irmi.com/Expert/Articles/2007/Levin12.aspx NEW HAMPSHIRE EMBRACES PRO RATA ALLOCATION FOR LONG-TAIL CLAIMS - Court rules continuous environmental injury is one occurrence per year, triggering all applicable policies. Kevin Merriman explains. http://www.irmi.com/Expert/Articles/2007/Merriman12.aspx RISK MANAGEMENT ASSESSMENTS AND PEER REVIEWS - Whether conducted in-house or by an outside consultant, a risk and insurance review is a good idea. Pete Polstein explains. http://www.irmi.com/Expert/Articles/2007/Polstein12.aspx COMMON LAW EXCEPTIONS TO THE 1973 "OWNED PROPERTY" EXCLUSION - Courts poked so many holes in the exclusion that it hardly excluded anything. Rich Scislowski explains the ISO solutions. http://www.irmi.com/Expert/Articles/2008/Scislowski01.aspx WHAT EXACTLY IS ACTUAL CASH VALUE? - Why are there so many problems surrounding the issue of ACV at claim time? Mike McCracken explores the reasons in various jurisdictions. http://www.irmi.com/Expert/Articles/2007/McCracken12b.aspx INSURABLE INTERESTS AND INTERESTS INSURED IN PROPERTY INSURANCE - William Austin describes a common mistake: spending insufficient time understanding the appropriate interests to be insured in a property policy. http://www.irmi.com/Expert/Articles/2007/Austin12.aspx RISK MANAGEMENT'S CHIEF AUDIT EXECUTIVE - Mark Layton says an effective CAE keeps an enterprise's risk/reward picture in balance by taking a holistic approach to risk management. http://www.irmi.com/Expert/Articles/2007/Deloitte12b.aspx Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Swiss Re and SBLI announce the closing of SBLI's private securitization New York, 11 January 2008 – Swiss Re and The Savings Bank Life Insurance Company of Massachusetts (“SBLI”) today jointly announced the closing of SBLI’s private securitization on December 28, 2007. Under the terms of the transaction, Swiss Re will fund up to $175 million of peak Regulation reserve requirements. According to Robert K. Sheridan, SBLI’s President and CEO, “This was an innovative extension of our ongoing relationship with Swiss Re. They already understood the high quality risk profile of our life insurance business and provided invaluable assistance in helping us establish our Arizona domiciled captive and cost effectively implement the transaction.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. INSURANCE NEWSLINK Articles Recent articles added to INSURANCE NEWSLINK, the worldwide, strategic concise intelligence database of over 30,000 articles including interviews, uniquely analysed by company, market, research, regulatory, and IT topics. Please click here for a content overview and a 15-day free review. THE TIME EFFECTIVE WAY TO STAY AHEAD
Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Professional Underwriters Adds Over 40 New Coverage Enhancements for Municipalities Exton, Pennsylvania, February 2008: Professional Underwriters, a national program administrator for public entities, announces that the company has added over 40 new coverage enhancements to their Community Works municipal insurance program. According to Tom Ruddy, vice president, marketing, “Our new GL and Auto coverage enhancements are designed specifically to meet or exceed the needs of municipal risks. Furthermore, these new enhancements strengthen our current product offering and further demonstrate that Professional Underwriters truly is ‘The Public Entity Specialist.’” Ruddy adds, “The enhancements provide tremendous value and were designed with input from municipal officials as well as a comprehensive market analysis to be sure that we were offering coverage unsurpassed in the industry today.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Professional Underwriters “Expanded” As “The Public Entity Specialist”, Professional Underwriters has built their company and reputation by providing specialized program services to agents, producers, and carriers throughout the country. Professional Underwriters offers complete insurance and risk management solutions for public and private schools through its Textbook program and for the municipal marketplace through its Community Works program. Their SafetyFIRST program is a comprehensive insurance program for independent school bus contractors and their Provantage PE program provides professional liability to the public entity sector. These programs are supported by experienced public entity underwriters, the financial strength of an A. M. Best “A” rated carrier, a broad range of coverages & eligible classes as well as public entity risk control assessment and risk management consultations. For additional information on Professional Underwriters and the various programs offered, log on to www.professionalunderwriters.com, www.textbookinsurance.com, www.communityworksinsurance.com, www.provantagpe.com, or www.safetyfirstprogram.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Insurance Commissioner Poizner Hosts Insurance Recovery Forum to Assist La Mesa and San Diego County Wildfire Survivors With Recovery Efforts For Release: January 10, 2008 LA MESA ― California Insurance Commissioner Steve Poizner hosted a town-hall style Insurance Recovery Forum for Harris fire survivors on Thursday in La Mesa. Commissioner Poizner was joined by local, state and federal officials, as well as representatives from the insurance industry who answered specific insurance questions for fire victims. "Thousands of homeowners were hit hard by the October wildfires in Southern California, and my heart goes out to all fire survivors for everything they have had to endure," said Commissioner Poizner. "The Harris fire ripped through the La Mesa community, destroying one hundred eighty-six homes. But I want all fire victims to know that they are not alone on the road to recovery. My Department is here to help until every last insurance claim is paid." www.insurance.ca.gov Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Industry Veteran John Skar Joins Legacy Funding Board and Unveils New Alternative to Secondary Market Transactions January 8, 2008 – New York, NY – Legacy Funding Group, Inc. announced today that former MassMutual Chief Actuary, John R. Skar, FSA, CLU, ChFC, has joined their Board of Directors. Skar, a leading actuary and insurance industry veteran, will direct Legacy’s underwriting operations. Legacy Funding is a specialty premium-finance company offering life insurance policyowners a new form of consumer loan, known as a LegacyLoanTM that pays premiums for the life of a policy, with a portion of the policy being pledged as the sole loan collateral. Larry Fondren, CLU, ChFC, FLMI, Legacy’s founder, commented that, “given John’s strident efforts to protect the value policyowners pass to their beneficiaries, and his 30+ years of actuarial experience, he is the ideal person to head our policy analysis and underwriting teams.” Mr. Skar noted, “For years, I’ve been critical of the high costs incurred by policy owners when they sell their policies in so-called ‘secondary market’ transactions but, until now, there was no viable alternative that allowed them to keep their policy for life, yet stop paying premiums.” Now policyowners can use a LegacyLoanTM to do just that…and to also be reimbursed for past premiums. He added, “Most importantly, policyowners can use a LegacyLoanTM to preserve the economic value of their policy for their heirs, at a low fully-disclosed cost, and receive greater benefits by keeping their policy rather than selling it!” In the January 2008 issue of The Insurance Forum, Joseph M. Belth opined that, “LegacyLoan is in the public interest because it eliminates the insurable interest problems associated with secondary market transactions, and because it provides greater benefits to policyholders...” While LegacyLoansTM deliver greater value to policyowners and beneficiaries, they also offer lower costs and higher returns to investors that fund them. As Professor Belth observed: “The primary reason for the financial advantage of the program is its elimination of almost all the compensation paid to intermediaries in the secondary market.” By dramatically reducing costs, and operating in a fully transparent environment, the Legacy Investment Trusts that fund LegacyLoansTM offer institutional investors greater yields that are uncorrelated to more traditional investments. Certain classes of the investment-grade “Collateralized Insurer Obligation” (“CIO”) bonds issued by the Trusts also provide a natural mortality-hedge benefit to insurers and other institutions currently bearing mortality-linked investment risk. For more information or to speak directly with Larry Fondren or John Skar, please contact Jennifer Connelly at (973) 625-1130 or jenn@jcpublicrelations.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
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21. Medrisk, Inc. Receives URAC Workers’ Compensation Utilization Management Accreditation KING OF PRUSSIA, PA (Jan. 14, 2008) - MedRisk announced today that it has been awarded the Workers’ Compensation Utilization Management (UM) Accreditation from URAC, a Washington DC-based health care accrediting organization that establishes quality standards for the health care industry. MedRisk, a claims services and medical management company, has been bringing innovative solutions to the workers’ compensation industry since the early 1990s. “We are proud to once again meet URAC’s rigorous and exacting accreditation standards for quality healthcare organizations,” said Jerry Poole, COO of MedRisk. “It’s another example of our team’s continued dedication to operational excellence and client satisfaction.” www.medrisknet.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Progressive Field New Home Of Cleveland Indians Progressive Signs 16-year Deal for Ballpark Naming Rights, Becomes Official Auto Insurer of the Indians CLEVELAND (Jan. 11, 2008)—In March of 1937, Steve O’Neill was managing the Cleveland Indians, the team was at Spring Training in New Orleans and preparing for another season at League Park at Lexington and East 66th Street in Cleveland. At the same time, just a few blocks away on Euclid Avenue, two young Clevelanders, Jack Lewis and Joe Green, were starting a car insurance company known as Progressive. Now, 70 years later, two Cleveland institutions—the Cleveland Indians and Progressive—are joining forces. Today, what’s currently known as Jacobs Field will become Progressive Field. Progressive, a leading car, motorcycle and commercial auto insurer, has partnered with the Indians on a 16-year deal for the naming rights to the ballpark and will also become the Official Auto Insurer of the Cleveland Indians. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Insurance Industry’s Financial Strength is Good News for Consumers, NAMIC Reports INDIANAPOLIS (Jan. 10, 2008) - The National Association of Mutual Insurance Companies (NAMIC) issued the following statement in response to allegations by the Consumer Federation of America regarding record profit levels among insurers. The comments may be attributed to Carl Parks, NAMIC’s senior vice president for government affairs. "Once again, consumers can rest easier knowing their insurance companies are in a strong position going into 2008. A stable and competitive insurance market is absolutely critical to our nation’s economic health. With our economy suffering some bad news in recent months, the strong financial standing of an insurance industry that was hobbled after 9/11 and the horrific hurricane season of 2005 is great economic news for all Americans. Additionally, a vibrant insurance industry is vital to hold down rates and increase competition for consumers. www.namic.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Guy Carpenter to Open Prague Office New York, January 14, 2008 Guy Carpenter & Company, LLC, the leading global risk and reinsurance specialist, today announced that it will be opening an office in Prague on March 1, 2008, to further develop business and serve clients based or conducting business in the Czech and Slovak Republics. The new office will be part of Guy Carpenter's Central and Eastern European broking operations. www.guycarp.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. WKF&C Offers Earthquake Deductible Buybacks for Residential and Commercial Risks Melville, New York…Tom Wilson, president of WKF&C Agency, Inc. has announced that they will be offering earthquake deductible buybacks from an A.M. Best rated “A“ admitted carrier. According to Wilson, “We’re excited to offer this new coverage which will cover the deductible of a commercial or residential earthquake insurance policy. Right now the coverage has been approved in California, Oregon and Washington.” www.wkfc.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. FITCH CASE STUDY: CDS, LCDS AND BOND TRADING Fitch Ratings-New York-11 January 2008: Fitch Ratings has published a report titled 'A Brief Review of the Basis,' that describes, in general terms, the nature and behavior of the relationship between CDS (credit default swaps), loan CDS (LCDS) and bonds over the turbulent market cycle of the last six months. More specifically, the 'basis,' or difference in trading levels (i.e. spread) between structures or instruments referencing or on the same entity was examined for several more volatile corporate names. Given the tremendous growth in the credit derivatives market, and the great variety of ways they are utilized, the degree to which credit derivatives track the underlying cash instruments should be of considerable interest to market participants and observers, as should the spread behavior of different credit derivative structures that reference the same entity. This report is an updated version of an article published in association with the 'Journal of Investment Management.' The full report can be found on the Fitch Ratings' web site at www.fitchratings.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Insurance Industry’s Response To Natural Disasters Hailed By Regulators Flood Insurance Reform and Credit Scoring High on Regulators 2008 Agenda NEW YORK, January 11, 2008 — Insurance commissioners praised the private-sector insurance industry’s swift response to recent natural disasters at the 12th annual Property/Casualty Joint Industry Forum, held here. “Though it is not well-known, we’re a boom state, economically,” said Louisiana Insurance Commissioner James Donelon, noting that the influx of billions in claims dollars paid following Hurricane Katrina in 2005 laid the groundwork for the state’s ongoing economic recovery. Donelon added that most of the financial resources for all of the economic activity resulted from the payout in Louisiana of $24 billion in private-sector insurance claims. Another $16 billion was issued to Louisiana policyholders of the federal government’s National Flood Insurance Program (NFIP), a program overseen by the Federal Emergency Management Agency (FEMA). Donelon’s remarks were made at a regulators panel. According to Donelon, the private-sector insurance industry’s ability to pay about one million auto, home and commercial claims in Louisiana within weeks of Hurricane Katrina making landfall, which resulted in the worst natural disaster in U.S. history, gave rise to Insure Louisiana, a state program that provides millions of dollars in grants to financially stable insurers who do not currently write coverage in Louisiana but have agreed to do so. Joining Commissioner Donelon on the panel were Massachusetts Insurance Commissioner Nonnie Burnes, Kansas Insurance Commissioner Sandy Praeger, and South Carolina Insurance Director Scott Richardson. David Sampson, president and chief executive officer of the Property Casualty Insurers Association of America (PCI) served as the moderator. www.iii.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. Allianz to trim stake in Munich Re to 2 percent Mon Jan 14, 2008 4:19am EST FRANKFURT (Reuters) - Allianz (ALVG.DE: ) is cutting its stake in reinsurer Munich Re (MUVGn.DE: ) to around 2 percent by repaying the rest of an exchangeable bond issued nearly three years ago, Europe's biggest insurer said on Monday. "As a result of the redemption of this index-linked exchangeable bond, Allianz's stake in Munich Re will be reduced to approximately 2 percent," Allianz said in a statement. (Reporting by Jonathan Gould; Editing by David Holmes) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. Consultancy says pension buyout cost too high Mon Jan 14, 2008 8:14am By Simon Challis LONDON (Reuters) - The option of transferring costly pension risks to "buyout" insurers is too expensive for many UK firms, even though their schemes' finances improved at the end of 2007, pension consultants Mercer said on Monday. The cost of offloading pension liabilities to buyout insurers fell significantly in 2007, said Mercer, as firms reduced the risks in their schemes, such as by moving out of volatile equities into safer investments and due to rising competition for business among the insurers. But, despite this, the cost to firms of seeking buyout remains much too costly for many to contemplate, said Mercer, a unit of Marsh & McLennan Cos Inc (MMC.N: ). Companies looking to transfer their pension risks to insurers often have to inject more cash into their pension schemes to take account of insurers' more conservative longevity assumptions and lower-risk investment strategies, as well as pay them a premium to cover their cost of capital and profit margin. © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 30. Vietnam Air, Bao Minh sign $4 bln insurance deal Sun Jan 13, 2008 8:55pm EST HANOI, Jan 14 (Reuters) - Vietnamese insurance firm Bao Minh BMI.HN, 16.6 percent owned by French insurer AXA (AXAF.PA: ), said it had signed a $4 billion insurance contract with national carrier Vietnam Airlines. The 64 trillion dong ($3.97 billion) deal would cover aircraft and the nine million passengers expected to fly the national carrier this year, Ho Chi Minh City-based Bao Minh said in a statement on its Web site (www.baominh.com.vn). ($1=16,104 dong) (Reporting by Ho Binh Minh; Editing by Valerie Lee) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 31.
BANK INSURANCE NEWS
IN BRIEF - JANUARY 14, 2008
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