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1. Buffett: Bank Woes Are "Poetic Justice" Thu Feb 7, 2008 10:00am EST TORONTO (Reuters) - The woes in the U.S. financial sector are "poetic justice" for bankers who designed and sold complex investments that have since gone sour, billionaire investor Warren Buffett said on Wednesday. The head of the Berkshire Hathaway Inc (BRKa.N:) (BRKb.N:) group of companies also played down worries about a credit crunch by saying that recent interest rate cuts mean low-cost funds are readily available. But he warned that the U.S. dollar will continue to slide unless the country can rein in its yawning trade deficit -- the "biggest factor" behind the decline. Still, he said, the U.S. economy will "do very well over time." Buffett, one of the world's wealthiest people, appeared to see irony in the fact that many of the banks who marketed complex investments which have now crashed are bearing much of the fallout. "It's sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end," he said. Buffett, a legendary investor who has amassed a huge fortune through plays in a wide range of industries, has bet against the U.S. dollar in the past. In 2005, Berkshire had made a $21.8 billion bet that the U.S. dollar would fall. It later unwound that successful position as it found other non-U.S. investments. Buffett said on Wednesday in Toronto that the turmoil that has rocked the U.S. economy in recent months has imbued the markets with a healthy degree of caution, while the rate-cutting response from central bankers has ensured that cheap money remains available for borrowing. "I wouldn't quite call it a credit crunch. Funds are available," Buffett said during a question and answer session at a business event. "Money is available, and it's really quite cheap because of the lowering of rates that has taken place." He added: "What has happened is a repricing of risk and an unavailability of what I might call 'dumb money,' of which there was plenty around a year ago." Buffet was in Toronto for the Canadian launch of corporate-news firm Business Wire, which Berkshire bought in 2006. Buffett tends to favor companies with relatively simple businesses, strong management, consistent earnings, good returns on equity, and little debt. As of late last year, Berkshire's businesses employed about 220,000 people and the number is growing as the group continues to expand its portfolio of companies. The units generated a $10.27 billion profit on revenue of $90.2 billion from January to September. ($1=1.01 Canadian) (Reporting by Wojtek Dabrowski; Editing by Rob Wilson) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Super Tuesday Tornadoes Tear Through U.S. Mid-South BOSTON, Feb. 6, 2008 -- More than two dozen tornadoes tore through the mid-South late last night, destroying homes, barns, and industrial buildings from Texas to Ohio. The severe thunderstorm outbreak, which included tornados, hail, heavy rain and lightning, killed nearly 50 people and injured 100 more. “Tuesday's severe weather was caused by a strong, developing low pressure system that moved out of east Texas during the day,” said Dr. Tim Doggett, senior research meteorologist at AIR Worldwide. “As the system moved into the Mississippi Valley, cold air from the plains was drawn southward. It clashed with the warm, humid air ahead of the system, triggering a cold front. The resulting cold front caused widespread thunderstorm formation in the middle of unstable air feeding in from the Gulf of Mexico. A dynamic jet stream located above the system provided the wind shear that fueled the numerous tornadoes.” The Storm Prediction Center has collected more than 70 reports of tornadoes, though the actual number of individual events is probably fewer. AIR meteorologists analyzed the SPC data and, based on time/space continuity of the reports, defined 25 individual tornados. In addition to the tornado reports, the SPC has recorded near 200 reports of straight-line winds and 112 reports of hail. There were several reports of hailstones the size of softballs (4.25"). In Tennessee, which suffered the worst damage, 15 students at Union University were trapped in their dormitories as shattered window and ceiling debris from a hard-hitting tornado prevented their escape. Approximately 40 percent of student housing buildings were destroyed, and classes at the university have been canceled for the next two weeks for cleanup. In Jackson, Tennessee, collapsed wreckage trapped fifty residents inside a retirement home. Last night's tornadoes also pulled a roof off a hangar at the international airport in Memphis. Forty miles outside Nashville, a tornado that struck a compressor station set off a natural gas fire that could be seen in the sky for miles around. The blaze was put out early Wednesday morning. In Arkansas, a tornado that touched down overturned trucks on Interstate 40. Thirty homes were destroyed in Atkins, prompting the Red Cross to put up shelters. Officials in Gassville sealed off the entire town after concerns that storm-related gas leaks would result in an explosion. A damaged hospital in Mountain View was forced to close its emergency room. In Muhlenberg County in western Kentucky, storms killed at least three people at a mobile home park. Meanwhile, a downpour that started in Evansville last night at 9 p.m. flooded major roads, causing street crews to barricade road access. Officials in surrounding counties reported heavy rains, downed trees and additional flooding. To the west, in Lafayette, Missouri, two industrial buildings, several homes and a church were destroyed by tornado winds, and in Ozark, there were reports of softball-sized hail. Heavy downpours prompted officials in Indiana to open the floodgates on Carroll County's Oakdale Dam, freeing excess water at a rate of 18,000 cubic feet per second. In Mississippi, the Emergency Management Agency estimated that 20 to 30 tornadoes pummeled the state in areas above the state capital of Jackson. A tornado damaged more than 30 homes at Fort Riley in Kansas. www.air-worldwide.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Risk Management Solutions (RMS) comments on this week's U.S. tornado outbreak An active storm system moving east across the U.S., triggered a severe weather outbreak in the Midwest on the night of Tuesday, 5 February. The driving force for the severe weather was the combination of a strong jet stream, unseasonably warm, moist air over the Midwest and an active cold front moving from the west. A warm and moist southerly airflow extended across the Midwest and Southeast States on Monday, 4 February following a warm front that tracked northward. Temperatures rose into the 70s and 80s Fahrenheit (20-30C) on Monday and Tuesday afternoon and due points reached the 60s (15-20C), indicating a very moist environment. On Tuesday afternoon/evening an active cold front crossed the Plains and in combination with the warm, moist airmass in place, produced a very unstable environment, capable of spawning severe supercell thunderstorms. The severe weather extended from northeastern Texas to the lower Ohio River Valley, covering 9 states in total. Supercell thunderstorms spawned numerous fatal tornadoes, damaging winds and hail measuring up to the size of softballs. Severe weather reports from the National Weather Service indicates there were 78 tornado reports, 220 wind reports and 119 hail reports. Tornadoes were reported in Tennessee, Arkansas, northern Mississippi and northern Alabama and there is confirmation of at least one tornado rated EF4 on the enhanced Fujita Scale in Alabama and numerous EF3 tornadoes through Tennessee, Arkansas and Alabama. It will take several more days until damage surveys are complete and the number and intensity of all the tornadoes is confirmed. Early evidence also suggests there were a few large, long-track tornadoes, most notably in Arkansas. As was the case with the Midwest tornado outbreak in January, several temperature records were broken across the South prior to the severe weather, contributing to an ‘out of season’ tornado outbreak. March and early April roughly mark the beginning of the spring severe thunderstorm season in North America. Severe thunderstorms are defined as those with hail at least 3/4 inch in diameter, winds 58 mph (93 km/hr) or greater or tornadoes. March/April is characterized by a rapid rise in tornado and hail activity, and the majority of tornadoes in the year occur between April and June. Geographically, the area of greatest activity moves over the course of a year. Over the winter months, activity is concentrated in the southeastern U.S., where the relatively warm Gulf of Mexico can help fuel thunderstorm development. The February 5, 2008 tornado outbreak is slightly further north than what is typically experienced at this time of year. Generally, as the year progresses, the area of peak activity expands northwards from the southeastern states, as the land surface begins to warm and the jet stream becomes established at more northern latitudes. It is not until late June and July that the Canadian Provinces experience their peak activity and this is only a fraction of the thunderstorm activity of Oklahoma or Texas during April and May. As cold air begins to progress south into the U.S. in autumn, thunderstorms again become more active in the Central U.S., with a second peak in tornado activity occurring during this time. Summary Hundreds of properties have been destroyed as a result of the severe weather outbreak and the death toll as of Thursday, 7 February stands at over 50 with hundreds more injured. At this time there is very little information regarding the exact number of properties damage but as damage assessments and the clean up operation continues over the next week the true extent and severity of this event is likely to emerge.Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Insurance Commissioner Poizner Announces that CDI Investigation Brings Alleged Scam Artist to a Halt LOS ANGELES ― Insurance Commissioner Steve Poizner today announced the arraignment of a fraud perpetrator for scamming two insurance carriers, UnumProvident and Liberty Mutual, out of more than $117,000. "When someone defrauds an insurance company, policyholders suffer through higher rates," said Commissioner Poizner. "This illegal behavior is unfair and will not be tolerated under my watch." A Department of Insurance (CDI) investigation revealed that after allegedly suffering an injury in 2004, Dr. Alice Berkowitz of Los Angeles filed claims with two private insurance carriers for long-term disability. Berkowitz claimed that her injuries resulted in her inability to work as a clinical psychologist for the remainder of 2004. During the period of Berkowitz's alleged injury, she collected more than $117,000 in benefits from two insurance companies. CDI investigators discovered that Dr. Berkowitz continued treating patients during the time she claimed to have been injured. The investigation further revealed that Berkowitz received payments from as many as 40 patients, amounting to more than $140,000. On December 11, 2007, Berkowitz surrendered to CDI fraud investigators and was booked on multiple counts of insurance fraud and grand theft. On January 3, 2008, Berkowitz was arraigned in Los Angeles County Superior Court. If convicted, Berkowitz could be sentenced to up to five years in state prison, a fine of up to $50,000, and court-ordered restitution to the insurance companies she allegedly defrauded. Berkowitz's next court hearing is scheduled for March 6, 2008 in Los Angeles County. This case is being prosecuted by the Los Angeles County District Attorney's Office. www.insurance.ca.gov. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. S&P Aims To Boost Ratings Confidence With Overhaul Thu Feb 7, 2008 2:22pm EST By Jonathan Stempel and Richard Barley NEW YORK/LONDON (Reuters) - Standard & Poor's unveiled an overhaul of its ratings process on Thursday, responding to widespread criticism of the quality and accuracy of credit ratings. S&P, a unit of McGraw-Hill Cos (MHP.N: ), announced 27 steps that it said would boost confidence in credit ratings. Rating agencies including S&P, Moody's Corp's (MCO.N: ) Moody's Investors Service and Fimalac SA's (LBCP.PA: ) Fitch Ratings have come under fire from investors who contend they helped precipitate the U.S. subprime mortgage crisis and credit market tightening that began in 2007. Critics say the agencies at first assigned high ratings to hundreds of billions of dollars of securities linked to low-quality debt, only to exacerbate market turmoil by later rapidly downgrading many of those same securities. This has contributed to write-downs piling up in the financial industry, hurting stock prices and causing losses in a variety of pension and mutual funds. S&P said it will appoint an ombudsman to look at potential conflicts of interest among analysts, and hire an outside firm to review compliance and governance processes. The agency will also periodically rotate analysts to ensure they don't get too close to the companies they rate, and review the work of analysts who leave S&P to join issuers they rated. S&P will add emphasis to factors not covered by traditional ratings, such as liquidity and volatility, and consider "what if" scenarios to prepare for market disruptions. It also plans to add an identifier to more clearly flag structured finance ratings, and distinguish them from corporate and government ratings. Many recent downgrades have affected mortgage- and asset-backed securities, and complex debt known as collateralized debt obligations. "What they're doing is a step in the right direction, but I think the regulators will have their say," said Luis Maglanoc, head of credit research at UniCredit. "Whether it really addresses all these calls for transparency, we'll have to see." (Additional reporting by Ritsuko Ando and Dena Aubin in New York; Editing by Diane Craft) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
6. Moody's says subprime loss estimates a "crapshoot" Thu Feb 7, 2008 11:21am EST NEW YORK (Reuters) - The review by Moody's Investors Service of the top ratings of bond insurers is taking time because "we're taking a great deal of care to get the answer right," Moody's Chief Credit Officer Andrew Kimball said on Thursday. Kimball added that there is "hysteria" in the markets over the expected cumulative losses from subprime residential mortgages, but at the end of the day no-one really knows how large they will be, saying "it's a crapshoot." "At the end of the day we'll make that call with due care," he told a conference organized by the New York Society of Security Analysts. The potential for a rating downgrade to drive an insurer out of business, and the potential knock-on effects from any possible downgrade require that care is made in reviewing the companies, Kimball added. Bond insurers are under review because ratings agencies argue that they do not have enough capital to hold the top "Aaa" ratings due to exposures to risky residential mortgages in their insurance portfolios. (Reporting by Karen Brettell; Editing by James Dalgleish) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. State insurance regulator testifies to need for greater oversight of medicare marketplace Comments Centered on Sales, Marketing by Medicare Private Plans KANSAS CITY, Mo. (Feb. 7, 2008) — Testifying before the U.S. Senate Finance Committee on the marketing and sales of Medicare private plans, Illinois Insurance Director Michael McRaith outlined several problem areas and urged cooperative federal-state oversight of the marketplace in order to better protect insurance consumers. “State insurance regulators receive frequent reports of a variety of problems,” said McRaith, who also serves as a member of the NAIC’s Senior Issues Task Force and chair of the NAIC’s Health Innovations Working Group. “Greater state authority is needed to both properly oversee the marketing activities of Medicare private plans and to quickly assist seniors who have been harmed.” McRaith also urged passage of the Accountability and Transparency in Medicare Marketing Act of 2007 (S. 1883), pending legislation that would supplement federal oversight with a limited grant of authority to states to monitor insurance company marketing activities. This legislation calls for a federal-state partnership approach to oversight of the marketing and sales of Medicare private plans, which is modeled after the process by which Medigap is regulated. “State insurance regulators have long-standing institutional knowledge, expertise and resources upon which to construct appropriate marketplace safeguards,” McRaith said. “A return of state oversight authority over Medicare Advantage and prescription drug plans would allow us to better protect seniors from companies and agents engaged in unscrupulous or abusive sales practices.” The most common problems that state insurance regulators have encountered are: Marketing and sales practices that pressure beneficiaries to enroll in unsuitable or inappropriate plans; Marketing and sales practices leading beneficiaries to enroll in Medicare Advantage plans without fully understanding that enrollment would lead to the loss of traditional Medicare and Medigap plans; Beneficiaries being misled about a Medicare Advantage plan’s provider network or provider reimbursement policies; Mishandling of enrollment applications; Beneficiaries being misled or not informed about a plan’s cost-sharing; Tying (i.e., cross-selling) tactics where agents use Medicare Part D as a pretext to develop a relationship with a senior and then sell the senior an unrelated and often unsuitable product (e.g., a Medicare Advantage plan or life insurance policy); and Outright common law fraud. “We work every day to protect consumers, especially those seniors who are among the most vulnerable members of our communities,” McRaith said. “With measured delegation of responsibility, state insurance regulators would not only continue to foster competitive insurance markets — but also ensure that seniors are not sold unsuitable coverage and have prompt resolution of any problems.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Advisen Report Analyzes Impact of Subprime Meltdown on D&O and E&O Insurers D&O insurers likely to suffer $3.6 billion in subprime-related losses NEW YORK--(BUSINESS WIRE)--More than $230 billion in writedowns from the subprime mortgage crisis have sparked a barrage of securities class action and related lawsuits that are likely cost to directors and officer liability (D&O) insurers $3.6 billion, according to a new report from Advisen Ltd., the leading provider of information and analytics to the commercial insurance industry. “The Crisis in the Subprime Mortgage Market and Its Impact on D&O and E&O Insurers,” Advisen’s forthcoming report, provides details on writedowns reported by more than 120 financial institutions around the world and analysis of the 181 subprime-related lawsuits filed to-date. Based on historical securities class action settlement patterns and D&O program limits and retention data from Advisen’s Program Benchmarking database, Advisen forecasts D&O losses of about $3.6 billion, most of which will be borne by a small group of financial institution D&O insurers. “The Crisis in the Subprime Mortgage Market and Its Impact on D&O and E&O Insurers” is available to subscribers of the full Advisen information platform for $200, and to non-subscribers for $500 by calling Advisen at 212.897.4800, or emailing support@advisen.com in the US, or +44 (0)20 7929 6929 or london@advisen.com in the UK. www.advisen.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Group Long-Term Care Insurance Sales Increase In 2007; 63 Percent Of Buyers Under Age 55 Paid Group LTCi Claims Up 17 Percent; Largest Claims Approach $500,000 There are now nearly 10,000 employer groups offering a form of employer-sponsored long-term care insurance with just over two million Americans insured by these plans," according to research conducted by the American Association for Long-Term Care Insurance and published in the organization's 2008 Sourcebook. "Sales of group long-term care insurance policies increased in 2007 compared to the prior year," explains Jesse Slome, Executive Director of the national industry organization. "Much of the growth came from new entrants into existing plans and buy-ups by existing policyholders." In 2007, the majority of buyers were under age 55 the Association study revealed. "Half of all new policies provided a current daily benefit of between $100 and $200-per-day," Slome reports. "Almost four out of five (79 percent) selected a five year or longer benefit period." Study Reports Age of Claimants; Percentage Paid For Home Care Four of the nation's largest group long-term care insurers paid a cumulative $172.1 million in claims during 2007, a 16.9 percent increase over their benefit payments the prior year according to the Association study. "Nearly 12 percent (11.9 percent) of those receiving first-time benefit payments from their group long-term care insurance were under age 60," states Slome. "The largest open claim ranged from $340,000 to $458,000 with claimants having received benefits for between six and nine years." The study also found that payments for home care accounted for nearly 40 percent (38.3 percent), while payments for nursing home care equaled 44.5 percent. The complete study findings are contained in the 2008 LTCi Sourcebook published by the American Association for Long-Term Care Insurance (www.AALTCI.org). Copies are provided to Association members. Non-members can purchase the 48-page publication (Pre-Publication price is $49 through March 1, 2008; $59 regular price) by calling the Association at (818) 597-3227. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. Regulators Should Allow Bond Insurers To Fail: Ackman Thu Feb 7, 2008 9:24am EST NEW YORK (Reuters) - Bill Ackman, whose hedge fund has been betting against bond insurers since at least 2002, said in a letter to U.S. regulators that rescuing the bond insurers will only prolong the credit crisis, and the companies should instead be allowed to fail. In the letter obtained by Reuters, Ackman said bond insurers in recent years have become a means for banks to avoid reporting their full credit exposure and make their capital ratios appear stronger, but that banks should be forced to own up to their full credit risk. "(W)e understand that the banking industry counterparties to the bond insurers would prefer to avoid taking these ... risks back on balance sheet -- particularly at a time when their balance sheets are strained by subprime and other losses that have not been hedged," Ackman wrote, adding that "there are no such free lunches available in the capital markets." Bond insurers have in turn been critical of Ackman and other investors betting against the companies. On a recent conference call, MBIA Inc (MBI.N:) Chief Executive Gary Dunton railed against "the fear mongering and intentional distortions of facts about our business that have been pumped into the market by self-interested parties." New York State Superintendent Eric Dinallo is working with banks to rescue bond insurers including Ambac Financial Group Inc (ABK.N:) and FGIC Corp, which face billions of dollars of potential losses after guaranteeing bonds linked to risky subprime mortgages and other debt. One idea floated by Dinallo early in discussions was banks putting up a rescue fund of about $15 billion to save the insurers, according to a person briefed on the matter. That idea has now given way to separate rescues of the companies, which collectively guarantee more than $2.4 trillion of bonds. But some analysts argue a rescue will take a lot more than $15 billion. Sean Egan, managing director of independent credit rating firm Egan-Jones Ratings Inc, says the top six bond insurers face roughly $80 billion of eventual losses, and probably need more than $200 billion of new capital. Ackman said in his letter that given the eventual losses the bond insurers face, banks that have traded with the companies should write down their exposure today and raise enough new capital so they can continue to operate safely. Banks and bond insurers should be forced to disclose their exposure to repackaged bonds and loans known as collateralized debt obligations immediately, Ackman added in the letter, which was addressed to Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and others. Ackman is founder of Pershing Square Capital Management, which has sold shares of Ambac and MBIA short in a bet they will decline. Pershing Square manages some $6 billion. In addition to these short positions, the company also buys shares of companies and agitates for change, as at McDonald's Corp and Wendy's. © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. MetLife Says Portfolio Unharmed By Mortgage Crisis NEW YORK, Feb 7 (Reuters) - MetLife Inc (MET.N:) executives on Thursday told investors the subprime mortgage crisis has inflicted minimal damage to its portfolio of investments and loans, and that the insurance giant remains comfortable with its exposure to mortgage markets and bond insurers. Subprime mortgages, or home loans extended to the riskiest borrowers, represent less than 1 percent of the insurer's $345 billion portfolio, or $2.2 billion at the end of 2007, the company said in a conference call. There were no write-downs and less than $1 million of realized losses during the fourth quarter. "We remain comfortable with both the amount and quality of our subprime residential mortgage-backed securities," said Steven Kandarian, MetLife's chief investment officer, in the call to discuss fourth-quarter results reported on Wednesday. (Editing by Brian Moss) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. How The Clinton And Obama Health Plans Differ From Joe Paduda’s blog, www.managedcarematters.com I've been meaning to get to this for weeks now - while I (and others) have reviewed and compared the two plans and parts thereof, I've yet to see a brief but (reasonably) comprehensive comparison. First, what these plans are not. They are not 'socialized medicine", single payer, or any version thereof. Both Obama and Clinton rely on private insurers to provide coverage, and make no changes to the health care provider community - they do not become government employees. We'll start with what others have said is the only real difference between the two - mandated universal coverage - Clinton's plan requires a mandate; Obama's doesn't. I disagree- there are several other key differences, issues that we'll highlight here and address in detail in future posts. The issues may seem picayune but the devil is in the details, and details in health care add up to half a trillion bucks or so. From reading Obama's campaign literature or speeches, it seems like the Senator is in favor of mandated universal coverage. Unfortunately, Obama's rhetoric is inconsistent with his plan, leading me to suspect he wants to have his cake, eat it too, and not get fat. Obama does have a mandate, but it is specific to children - he requires all kids to have coverage, but his plan does not require working-age people obtain coverage. (Disclaimer - this is not all-encompassing, but rather meant to hit the high and medium points without getting down to the molecular level) Here's where Clinton and Obama (mostly) agree, with differences noted. Guaranteed eligibility - insurers have to take all comers. That is, individuals with cataracts and family history of cancer and hypertension get coverage - they can't be denied coverage or care. Benefit plan design - Both call for a benefit design similar to the Federal Employee Health Benefit Plan - which is not too shabby. By definition, this eliminates individual states' ability to mandate certain types of care (e.g. acupuncture) and therefore transfers determination and regulation of health plan benefits from the States to the Feds. Obama would allow states to experiment with richer benefits and plans, as long as those exceed the national standard. Nothing controversial here. Mental health parity is a part of both candidates' plans. Insurance buying/regulatory agency - Both will set up a health insurance exchange/agency/entity to regulate insurers, facilitate enrollment, and provide information to consumers and employers. Obama goes quite a bit further, perhaps up to and over the edge of insurance price control - his website says the "plan will force insurers to pay out a reasonable share of their premiums for patient care instead of keeping exorbitant amounts for profits and administration." (So, if a health plan does a really good job of managing care and reducing cost, they are penalized? (Sorry, couldn't resist)) Funding - Both will require contributions from employers, insureds, and taxpayers, who will provide some of the funding for those in lower income brackets. In Obama's plan, some small employers (no definition provided) will not have to help pay premiums; Clinton offers small employers (again, not defined) a Federal tax credit to help pay for insurance. Obama also promises to cover some portion of employers' high cost claims; the assumption here is that his plan would have the Feds provide stop-loss insurance for claims above a certain dollar threshold. Clinton provides a similar mechanism, but only for retiree coverage. (this is a significant difference, but one no one is talking about). In addition, Clinton would partially fund her program by rolling back the Bush tax cuts on individuals with incomes <$250,000 In contrast to Obama, Clinton's plan relies on direct tax subsidies for low-income folks to help them buy coverage. Cost and premiums - Here, Obama's plan is silent on age rating - the actuarially-sound process of charging older folks more because they are more likely to need care. Clinton specifically prohibits "charging large premium differences based on age, gender, or occupation." (One wonders, what is "large"?) Clinton will also base premium payments on income. Portability - people can change jobs and keep their health insurance under both plans. Pay for Performance (P4P) - both candidates support pay for performance, along with requirements that providers publish their outcomes data. Prescription drugs - Obama and Clinton will allow reimportation and both will allow the Feds to negotiate pricing for Part D and other Federal programs. Medical Malpractice reform - Clinton calls for "adoption of a model that provides liability protections for physicians who disclose medical errors to patients and who offer to enter into negotiations for fair compensation." The plan would reduce their liability if the complied with reporting requirements, a measure that would both cut costs and encourage reporting. And one other nuance Clinton's plan specifically allows individuals to keep their existing coverage or opt to replace it with another private or public plan (modeled on Medicare). Next - a series of posts on the differences between the two... Posted by on February 6, 2008 7:34 PM | Permalink Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Who is the best target for your insurance marketing efforts? Society of Insurance Research Past President Candace Thornton will address that question in a free webinar just a few days from now. Host: Chris W. Kite, MBA, Vice President of Business Development, COSS Click here to Register now! This discussion, part of the Market Connection series hosted by COSS, will help uncover your best target in light of competitive forces with a case study on insurance consumer segmentation. Candace will discuss: Who are the best targets? Where are they? What is the cross-sell wallet? The back-story of consumer segmentation. Find out the match key necessary to bring many sources of data together that will assist you in making strategic decisions. The foundation from which to build great cross-sell or new acquisition targets. The findings in Claritas' latest insurance primary research study of 35,000 consumers respondents. Sliced by life stage segments, the results will show key insurance behaviors and why consumers choose particular carriers. The 45 minute webinar will be followed with a Q&A session for your questions about insurance market segmentation. Visit www.sirnet.org to learn more about the Society of Insurance Research. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Commissioner Approves Decrease for Workers’ Compensation Loss Costs (Carson City) - Nevada Insurance Commissioner Alice A. Molasky-Arman has approved revised workers’ compensation voluntary loss costs and assigned risk rates filed by the National Council on Compensation Insurance (“NCCI”) to become effective March 1, 2008. The new loss costs and rates will apply to employers on their anniversary rating dates. Voluntary loss costs are decreasing an average of 10.5 percent and assigned risk rates are decreasing an average of 10.1 percent. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Real Estate Fund-of-Funds TKP largest in Europe On February 6th TKP Pensioen Real Estate Fonds (“TREF”) has grown to over EUR 1 billion invested capital. Reaching this milestone makes TREF the largest European Fund-of-Funds in real estate for institutional investors. TREF is managed by the asset managers of TKP. TREF’s fund investments are spread geographically throughout Europe. The portfolio combines 39 real estate funds and joint ventures, giving investors exposure to direct retail, residential and industrial real estate markets, as well as to hotels and parking garages. In the past year investments in the undervalued Nordic region and the developing markets of Central and Eastern Europe have been added to its portfolio. The diversification provides TREF with a well-balanced risk profile. www.aegon.nl Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Banks Must Act To Avoid Regulatory Backlash - EU Thu Feb 7, 2008 5:48am EST BRUSSELS, Feb 7 (Reuters) - The European Union financial services industry must act fast to avoid a regulatory backlash and mandatory change, the bloc's top market regulator said on Thursday. EU Internal Market Commissioner Charlie McCreevy, responsible for shaping the 27-nation bloc's financial rules, said the global credit crisis highlighted flaws but ultimately markets must self-correct. "If the industry wants to avoid a regulatory backlash, it must show itself capable of stepping up to the mark. Not with a grudging de minimis approach, but with real leadership and commitment," McCreevy said in a speech to the Royal Institute of International Affairs in London and made available to the media. (Editing by Dale Hudson) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Access Is Not Enough: What It Will Take to Transform Health Care in the United States Aspen Institute Health Stewardship Project to Release Health Care Reform Principles and Announce Questionnaire Targeted at Presidential Candidates WASHINGTON--(BUSINESS WIRE)--The Aspen Institute Health Stewardship Project will announce comprehensive health care reform principles that will enrich the health care reform debate and questions to help evaluate the proposed policies as candidates and policymakers begin to craft reform proposals. Consistent with the Institute’s history and ideals, the project has convened a bipartisan group of thought leaders to inform the nation’s efforts to transform health care. WHO: Christine Todd Whitman, former governor of New Jersey and founder of the Whitman Strategy Group Mark Ganz, president and CEO of Regence Blue Cross Blue Shield Robert Honigberg, chief medical officer of GE Healthcare Elizabeth Teisberg, author and associate professor at the University of Virginia Darden School of Business WHEN: Wednesday, Feb. 13, at 9 a.m. WHERE: National Press Club, Holeman Lounge 529 14th Street NW, Washington, DC 20045 CALL INFORMATION: Journalists unable to attend the news conference are welcome to take part via teleconference by calling 800-954-0696. RSVP: Please contact Noah Bartolucci, project communications director, at noah.bartolucci@aspeninstitute.org. A continental breakfast will be served at 9 a.m., and opening remarks will begin at 9:30 a.m. BACKGROUND: The project is chaired by Christine Todd Whitman, former governor of New Jersey and founder of the Whitman Strategy Group; Mark Ganz, president and CEO of Regence Blue Cross Blue Shield; and Joe Hogan, president and CEO of GE Healthcare. In addition to the co-chairs, the project features an advisory board of 10 people, including doctors, scholars, health policy experts and information technology leaders. The project’s director is Michelle McMurry, M.D., Ph.D., of the Aspen Institute. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Prudential Group Disability Professional Available to Discuss Absence Management, Family Medical Leave Trends and Issues NEWARK, N.J.--(BUSINESS WIRE)--As American workers continue to seek better opportunities to balance work and family needs, the implementation of the Family Medical Leave Act (FMLA) of 1993 persists in posing challenges to employers grappling to better track and manage their employees’ time. According to the Department of Labor, an estimated 94 million employees work in establishments covered by the FMLA, and up to 13 million workers took leave under the law in 20051. The Prudential Insurance Company of America, Newark, NJ (Prudential), disability insurance executive Terrie Sorensen is available to address trends and issues employers face when implementing the Family Medical Leave Act (FMLA) and absence management programs. www.prudential.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Phoenix Announces Intention to Spin Off Phoenix Investment Partners HARTFORD, Conn.--(BUSINESS WIRE)--The Phoenix Companies, Inc. (NYSE:PNX) announced today that it intends to spin off its asset management subsidiary, Phoenix Investment Partners (“PXP”), to Phoenix’s shareholders. “Our Board and management team believe that separating these businesses is the next logical step in our ongoing efforts to build value for all of our shareholders,” said Dona D. Young, chairman, president and chief executive officer of The Phoenix Companies. “This action is the culmination of careful, thoughtful moves we have made over the course of five years to rebuild our asset management business – a series of steps that opened up an increasingly broader range of options. Last year, we began another comprehensive analysis of these options, together with independent financial advisors, and concluded it is now possible to pursue a spin-off. Separation will increase clarity on valuation for the respective businesses and serve the best long-term interests of both companies and their shareholders by allowing them to grow under different operating models best suited to each business,” Mrs. Young said. www.phoenixwm.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
View INSURANCE NEWSCAST "Sports Pictures Of The Day" View INSURANCE NEWSCAST "Entertainment Pictures Of The Day"
21. ACE Limited Announces Planned Issuance of $300 Million Senior Notes by Subsidiary HAMILTON, Bermuda--(BUSINESS WIRE)--ACE Limited (NYSE:ACE) announced today that, subject to market conditions, its subsidiary, ACE INA Holdings Inc., intends to sell up to $300 million of senior notes. The notes will be fully and unconditionally guaranteed by ACE Limited. The net proceeds from the sale of the senior notes will be used to pay a portion of the purchase price for ACE’s acquisition of Combined Insurance Company of America. The acquisition is expected to close in the first half of 2008. The sole book-running manager for the proposed offering is Banc of America Securities LLC. www.acelimited.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Omega Insurance gets bid approaches, shares jump LONDON, Feb 7 (Reuters) - London-listed Omega Insurance Holdings (OIH.L:) said on Thursday it was in discussions with a number of parties who have expressed an interest in buying it, pushing its shares up over 15 percent. The Bermuda-based firm, whose primary operating entity is in the Lloyd's of London [LOL.UL] market with other units in the United States and Cologne, saw its shares jump 15.2 percent to 174 pence at 1319 GMT, valuing the firm at around 242 million pounds ($472.4 million) according to Reuters data. Lloyd's insurers have attracted the acquisitive attentions of foreign rivals in recent months. Heritage Underwriting Agency (HUA.L:) said in January it had received approaches, while Japan's Millea has agreed to acquire Kiln Ltd (KIN.L:) for 442 million pounds. A Lloyd's acquisition would allow foreign firms to grow more quickly than they could on their own, while also diversifying their businesses, by using the market's wide array of worldwide operating licences. (Reporting by Simon Challis; Editing by David Holmes) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. MBIA to Raise $750 Million for Insurance Unit Thu Feb 7, 2008 3:01am EST NEW YORK (Reuters) - MBIA Inc (MBI.N:) said on Wednesday it would raise $750 million by issuing new shares, as the largest U.S. bond insurer tries to boost its capital to retain the top credit ratings crucial for its business. But the additional capital may not help with rating agency Fitch. On Tuesday Fitch said MBIA's main bond insurance unit could lose its triple-A rating even with new capital, because the bond insurer is facing such big potential losses after guaranteeing repackaged subprime debt and other complex assets. It will not be easy for MBIA to sell the 50.3 million common shares it aims to issue in the public market. But Warburg Pincus, a private equity firm that invested $500 million in MBIA last month, has agreed to make up for any shortfall in MBIA's target of raising $750 million of capital in public markets. (Additional reporting by Megan Davies) (Reporting by Dan Wilchins; Editing by Braden Reddall, Leslie Gevirtz) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Hawaii, California, Alaska, Nevada and West Virginia Are Most Expensive States to Own a Vehicle, According to Edmunds.com’s True Cost to OwnSM Study SANTA MONICA, Calif.--(BUSINESS WIRE)--A new study by Edmunds.com, the premier resource for automotive information, shows that owning a vehicle in California or Hawaii costs $10,000 more than it does in New Hampshire over a five-year period. This study employs data from Edmunds.com’s True Cost to OwnSM tool, which projects model-specific, regional average vehicle ownership costs, consisting of depreciation, financing, taxes, fees, insurance premiums, fuel costs, maintenance and repairs. The tool is available at no charge to Web site visitors, and provides ownership cost information for both new and used vehicles. “Many consumers neglect to consider ownership costs when deciding which vehicle to buy,” said Philip Reed, Senior Consumer Advice Editor for Edmunds.com. “Every shopper should look beyond transaction price when determining how a vehicle purchase will fit into the household budget, especially since some expenses can differ dramatically for different types of vehicles. For example, luxury cars tend to have much higher maintenance costs, while sports cars often result in high insurance premiums.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. Health Coach University Sets New Standard For Health Promotion And Coaching Lifestrive Corporate Wellness Consultants announced today that they have released their newest health promotion application, Health Coach University. Richard Perryman, Managing Partner of Lifestrive states; “This community is designed to provide a scalable and extremely cost-effective alternative to traditional telephonic coaching programs by playing off the enormous success of online communities such as Facebook and Myspace. Health Coach University breaks new ground in creating a virtual community focused on health and wellbeing wherein employees are engaged in online classrooms targeted to their risk factors, conditions and/or interests in the domain of health promotion and wellness”. The product is an imbedded benefit to the existing Lifestrive portal which includes the patented Auto-administration of financial credits for completion of online e-Learning modules. This combination of systems allows employers to maximize employee participation while saving up to 20% on health benefits costs and shifting key responsibility for individual health parameters to the employee. Perryman continued; “Whereas our program typically drives 90% + participation in our wellness and health promotion programs, having a virtual classroom environment is necessary and logical to control program costs while delivering the in-depth education necessary to facilitate real change in ones diet and lifestyle. Telephonic coaching programs must assume very low participation rates to keep the costs down. Those types of assumptions neither serve the employer/client or the employee very well if our goal is to engage and educate a community and create a culture of Health-Responsibility.” For more information contact Richard Perryman@ (602) 956-3401 or rperryman@lifestrive.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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