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1. Banks Face "Systemic Margin Call," $325 Billion Hit: JPM Sat Mar 8, 2008 9:23am EST By Walden Siew NEW YORK (Reuters) - Wall Street banks are facing a "systemic margin call" that may deplete banks of $325 billion of capital due to deteriorating subprime U.S. mortgages, JPMorgan Chase & Co (JPM.N: ), said in a report late on Friday. JPMorgan, which sent a default notice to Thornburg Mortgage Inc. (TMA.N: ) after the lender missed a $28 million margin call, said more default notices and margin calls were likely. The Carlyle Group's mortgage fund also failed to meet $37 million in margin calls this week. "A systemic credit crunch is underway, driven primarily by bank writedowns for subprime mortgages," according to the report co-authored by analyst Christopher Flanagan. "We would characterize this situation as a systemic margin call." The credit crisis that began about a year ago will likely intensify after Friday's weak February U.S. employment report "that most definitely signals recession," JPMorgan said. Indeed, corporate bond spreads widened to a new record on Friday, surpassing levels seen in October 2002 during a boom in bankruptcies following the dot-com crash. U.S. employers cut payrolls in February for a second consecutive month, slashing 63,000 jobs, the biggest monthly job decline in nearly five years, the U.S. Labor Department reported on Friday. "The weak February employment report points to an economy in recession," JPMorgan said. The JPMorgan report included a revised bleaker forecast for subprime-related home prices. The bank now sees prices falling 30 percent, from its prior 25 percent forecast. Those prices have declined 14 percent since mid-2006, JPMorgan said. The U.S. jobs results also came after the Federal Reserve expanded the amount of its short-term auctions to $100 billion in total in the central bank's latest effort to ease credit concerns. Ongoing concerns about bond insurers, known as monolines, and their effort to save their top ratings also are weighing on market sentiment. (Editing by Eric Beech) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Scottish Re Delays 10K Filing On Subprime Issues Fri Mar 7, 2008 6:34pm EST NEW YORK, March 7 (Reuters) - Life reinsurer Scottish Re Group Ltd (SCT.N: ) said on Friday it will be unable to file its annual report form 10-K by the March 17 due date. The company, which said last month it may sell its international life reinsurance and wealth management units, needs more time to address accounting and disclosure requirements related to its holdings of sub-prime and Alt-A securities. The company said its independent auditors also need more time. Scottish Re expected to make the 10-K filing on or about April 1. It plans to report fourth-quarter earnings on March 27. (Reporting by Chris Reiter; Editing by Andre Grenon) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Ex-AG Edwards Trader Gets 3 Years in Prison Fri Mar 7, 2008 1:01am EST NEW YORK (Reuters) - A former A.G. Edwards and Sons Inc stock-loan trader was sentenced to three years in prison on Thursday for conspiring to defraud his former employer in a scheme involving phony finders' fees. Michael McCormack, 33, was also ordered to pay $900,000 in restitution to A.G. Edwards, a unit of Wachovia Corp (WB.N: ), by U.S. District Judge John Gleeson during a hearing in Brooklyn federal court. "I know what I did was wrong," McCormack told the judge, his voice breaking as his family watched. McCormack had pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and faced a sentence of between 41 and 51 months under sentencing guidelines. The sentencing is the latest development in a larger federal investigation into phony finders' fees and illegal kickbacks in the stock loan industry. The investigation, which is being conducted by the U.S. attorney's office in Brooklyn and the FBI, is ongoing. Prosecutors have charged 17 people, including former stock- loan traders at Morgan Stanley (MS.N: ) and Janney Montgomery Scott. The U.S. Securities and Exchange Commission has also filed civil charges against more than three dozen people. Stock loans are made as part of short sale or other transactions that require the investor to borrow shares. Finders are third parties who locate a counterparty for stock loans in exchange for a fee. McCormack, along with his former wife, Donna Centola, formed a finder firm, DMAC Services Inc, in 2001, but then made deals with other stock lending representatives at the cost of A.G. Edwards, prosecutors said in court documents. In the scheme, other brokerage firms would pay stock finder's fees to DMAC, even when it had provided no legitimate service, according to the papers. In return, McCormack got A.G. Edwards to enter into stock- loan transactions on terms that were less favorable than those available in the market, according to the papers. In total, from March 2001 through 2005, DMAC was paid about $918,000 in finder's fees, prosecutors said. "Our investigation has shown that neither the defendant nor A.G. Edwards ever had a legitimate business need for finder work by DMAC Services," Assistant U.S. Attorney Sean Haran wrote in a letter to the court. McCormack, who now lives with his girlfriend in Staten Island, is expecting a child in June. After leaving A.G. Edwards in 2005, he went into business with his brother, running a potato-chip delivery route from February 2006 until September 2007, according to court papers. He is due to report to prison on July 11. Asking the judge for leniency, his lawyer, Matthew Santamauro, wrote McCormack had "simply made a mistake." "At a rather late stage of his life he volitionally elected to commit what will clearly be considered the most stupid act he has ever done," Santamauro wrote. (Reporting by Paritosh Bansal; Editing by Andre Grenon) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Illinois AG Subpoenas Countrywide, Wells Fargo Fri Mar 7, 2008 1:02am EST By Gina Keating LOS ANGELES (Reuters) - The Illinois attorney general subpoenaed units of Countrywide Financial Corp (CFC.N: ) and Wells Fargo & Co (WFC.N: ) on Thursday in an investigation of whether the companies violated federal lending and civil rights laws by steering minority borrowers into more expensive loans. The action by Attorney General Lisa Madigan follows a Chicago Reporter magazine study that found Chicago led the United States in high-cost home loans and revealed disparities in loan pricing between white and non-white borrowers. Madigan said in a statement that her office was looking into reasons for the pricing disparities and whether the differences were based on valid underwriting and credit-worthiness. Countrywide's lending practices are already being investigated by federal and state authorities and it is being sued by investors and mortgage holders. (Editing by Toni Reinhold) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Citigroup, Wells Fargo, And BB&T Were Top Banks In Insurance In 2007 Mamaroneck, NY—March 8 2008: Citigroup, Wells Fargo, and BB&T were the top U.S. bank holding companies (BHCs) in 2007 as measured by insurance brokerage revenues, the Bank Insurance Market Research Group reported today. These three bank companies also headed the list in 2006 (see table below). Wells Fargo increased its insurance brokerage revenues 19 percent in 2007, mainly through acquisition—most notably its purchase of Greater Bay Bancorp, itself a top 10 ‘bank in insurance’ in 2006. ABP is asset-base penetration (insurance brokerage/bank assets)
Source: Who’s Who in Bank Insurance Bank of America’s revenues fell 7 percent after selling its commercial insurance agency to Hilb Rogal & Hobbs Co. in the second half of 2007. JPMorgan Chase’s revenues plummeted 66 percent, largely the result of the sale of its Zurich Insurance legacy insurance business to Protective Life Insurance in July 2006. BancorpSouth, Inc. (MS) and Unionbancal Corp. (CA) joined the top ten list for the first time. Both have substantial commercial insurance operations. BancorpSouth, with only $13.2 billion in balance-sheet assets, was the smallest bank on the top ten list-- by a wide margin. . The rankings here are based on an examination of recent Federal Reserve Board Y-9 filings. A more comprehensive bank insurance list will appear in an upcoming issue of Singer’s Annuity & Funds Report, with more in-depth analysis, including narrative, to appear in Who’s Who in Bank Insurance, BIMRG’s study of the top 100 banks in insurance, published annually in the fall. The Bank Insurance Market Research Group (www.singerpubs.com) provides market research and investment sales data to the bank and insurance industries. Data is based on in-depth surveys of depository and insurance entities augmented by analysis of government data. It also publishes the upcoming Who’s Who in Bank Wealth Management, which profiles the top 60 U.S. bank companies in wealth management. NOTE: Credentialed members of the press may obtain additional information by Andrew Singer at 914-381-7475. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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For more information send an e-mail to tedd@insurancebroadcasting.com, call 888-282-1765 or click here to read the media kit online. www.InsuranceBroadcasting.com 6. In Response to Inquiries, MBIA Further Addresses Its Decision to Request Withdrawal from Fitch Ratings ARMONK, N.Y.--(BUSINESS WIRE)--MBIA (NYSE:MBI) today announced that in response to inquiries it has received as a result of its decision to request immediate withdrawal of the Insurer Financial Strength (IFS) ratings assigned by Fitch Ratings, the Company is issuing this statement. Fitch’s ratings process differs in many significant respects from those of the other rating agencies, which affects how investors assess value. Fitch’s coverage of the underlying credit quality of the transactions that MBIA insures is limited, and in turbulent times, the impact of this difference becomes significant, raising the risk of misinterpretation. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Credit Crisis Seen Lasting Until After Summer Sat Mar 8, 2008 6:00am EST BRUSSELS (Reuters) - The global credit crisis stemming from the U.S. subprime mortgage woes may last until after summer holidays in Europe, longer than previously thought, KBC's (KBC.BR: ) chief executive officer, Andre Bergen, was quoted as saying. Continued falls in prices of collateralized debt obligations (CDOs) and other financial instruments are set to enforce more writedowns at banks in the first quarter of 2008, Bergen told economic daily De Tijd in an interview published on Saturday. "Everyone is anxiously awaiting the results for the first quarter, then they will seek confirmation in the second quarter and then it is summer already," said the chief of the Belgian banking and insurance group. "I fear we will only be able to speak of an eventual recovery after the holidays at the earliest." Bergen had earlier predicted the credit crisis would end around March. He said the crisis could be looked at in a positive way by many banks. "By adjusting the value of portfolios immediately we are opting for short-term pain and we are not sweating our bad credit over years as the Japanese banks have done," he said. (Reporting by Phil Blenkinsop, writing by Marcin Grajewski, editing by Mike Peacock) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Congressional Panel Rips Subprime CEOs' Lavish Pay Fri Mar 7, 2008 6:11pm EST By Kevin Drawbaugh WASHINGTON (Reuters) - The fat compensation packages of three U.S. CEOs whose companies are being hammered by the widening mortgage crisis came under harsh criticism on Friday at a congressional hearing on executive pay. In the last two quarters of 2007 alone, the three executives' firms lost more than $20 billion on investments in subprime and other risky mortgages, said the House of Representatives Oversight and Government Operations Committee. Yet the three took home fortunes in 2007 -- $120 million for Countrywide Financial Corp (CFC.N: ) CEO Angelo Mozilo; a $161 million retirement package for ex-Merrill Lynch (MER.N: ) CEO Stanley O'Neal; and $39.5 million in stock, options, bonus and perks for former Citigroup (C.N: ) CEO Charles Prince. "The mortgage crisis is having enormous repercussions. Families are losing their homes ... Thousands are losing their jobs. It seems like everybody is hurting, except for the CEOs who had the most responsibility," said California Democratic Rep. Henry Waxman, committee chairman. In a hearing room packed with bank lobbyists and lawyers, Waxman said, "I have no problem with paying for success. But it looks like when you're a CEO you get paid for failure." Mozilo, O'Neal and Prince told Waxman's panel that they earned their compensation. They conceded misjudgments in the subprime debacle, while one Republican lawmaker blasted the hearing as "a sanctimonious search for scapegoats." (Reporting by Kevin Drawbaugh; Editing by Diane) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Merge Healthcare Announces the Execution of an Agreement in Principle Regarding the Settlement of Its Derivative Action $1,050,000 Received from Primary Insurance Carrier MILWAUKEE--(BUSINESS WIRE)--Merge Healthcare Incorporated (NASDAQ: MRGE)(TSX: MRG), today announced the execution of an agreement in principle with the plaintiff and other defendants in the derivative action against Merge Healthcare. The agreement provides for the settlement and release and dismissal of all claims asserted by plaintiff in the complaint, but the Company has not released any claims against its former officers. In exchange, Merge Healthcare has agreed to a one time cash payment of $250,000 for legal costs incurred by the plaintiff. In addition, the settlement documentation will reflect that Merge Healthcare and the other defendants continue to deny that they have committed or attempted to commit any violations of law or breached any duty owed to Merge Healthcare or its shareholders. The settlement is subject to, among other things, the drafting and execution of the settlement documents and the approval of the settlement by the court. www.mergehealthcare.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. ACE USA Introduces a Policy to Address Environmental Concerns for Its Global Property Commercial Risk and National Accounts Programs PHILADELPHIA--(BUSINESS WIRE)--ACE USA, the U.S.-based retail operating division of the ACE Group of Companies, today announced that it has introduced an endorsement and stand-alone policy to assist customers who want to repair or rebuild damaged, covered real property to an environmentally-friendly standard for its Global Property Commercial Risk and National Accounts product offerings. Called “ACE Green Building Restoration,” the stand-alone green policy is part of ACE Group’s growing portfolio of green products. www.ace-ina.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. Arthur J. Gallagher & Co. Acquires The Splinter Group, Inc. ITASCA, Ill., March 7 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co. today announced the acquisition of The Splinter Group, Inc. of Park Ridge, Illinois. Terms of the transaction were not disclosed. Founded in 1948, The Splinter Group, Inc. is a retail insurance broker offering risk management, commercial property/casualty, employee benefits and personal lines insurance services to their clients in the Mid-West. They specialize in products and services for the construction and manufacturing industries. Craig Splinter and his associates will relocate to Gallagher's offices in Itasca, Illinois under the direction of Thomas J. Gallagher, Mid-West Regional Manager of Gallagher's Retail Property/Casualty Brokerage operations. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Hagens Berman: Eleven Defendants Settle in Average Wholesale Price Litigation Two major defendants - AstraZeneca and Bristol-Myers Squib - not part of settlement BOSTON, March 7 /PRNewswire/ -- Today eleven major pharmaceutical companies, including Abbott Laboratories (NYSE: ABT) and Watson Pharmaceuticals (NYSE: WPI), agreed to a $125 million nationwide settlement in the average wholesale price (AWP) litigation filed in 2002 by consumers and insurance companies, which claimed the defendants intentionally inflated reports of the average wholesale prices on certain prescription drugs. The published AWP is used to set the price that consumers making Medicare Part B co-payments and Medicare pay for the drug, as well as insurance companies and other third-party payors. The lawsuit contends that consumers and third-party payors paid more than they should because of the drug companies' false AWP reporting. http://www.hbsslaw.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. ChoicePoint Enters Strategic Alliance with Injury Sciences LLC to Help Reduce Insurance Claims Losses ALPHARETTA, Ga. and SAN ANTONIO, Texas, March 7 /PRNewswire-FirstCall/ -- ChoicePoint(R) (NYSE: CPS) and Injury Sciences LLC today announced a strategic alliance which will enable insurers to reduce total claims losses while enhancing operating efficiencies through the use of their combined predictive modeling and forensic intelligence solutions. http://www.choicepoint.com http://www.injurysciences.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Fidelity Life Association’s Lifetime Benefit Term - A Great Success in the Work-Site Marketplace March 6, 2008, Oak Brook, IL—Fidelity Life Association’s (FLA) new Lifetime Benefit Term has proven to be very successful in the worksite marketplace. In fact, in just a few months after its introduction, Fidelity Life has written nearly 2,500 applications for a total premium of over $1.5 million. Lifetime Benefit Term competes favorably with permanent life products typically found in the voluntary marketplace. It is a level death benefit, guaranteed premium product with face amounts generally 10-30 percent greater than those of competing products with premiums that can be as low as $3 per week. Fully portable, Lifetime Benefit Term is available to employees on a Conditional Guaranteed or Simplified Issue basis, with additional options for spouses and dependents. An additional unique feature is its ability to accumulate Guaranteed Paid-Up death benefit, a benefit rarely found in a term product. Lifetime Benefit Term was developed by Fidelity Life. Over the past 18 months FLA has been working to develop additional innovative products for the voluntary benefits marketplace. Fidelity Life, founded in 1896, has partnered with Vision Financial, the nation’s leading worksite marketing administrator. FLA joined National Benefit Partners (NBP), a worksite marketing distribution company, as an Allied Carrier in 2006. Senior Vice President Paul Laroche says, “Fidelity Life is committed to our market and very open to new and innovative product ideas. Add in Vision Financials administrative expertise and you’ve created a winning team.” “In essence, you could say Lifetime Benefit Term was ‘producer-designed,’” adds Ron Lovik, worksite product line director for Fidelity Life. “We worked closely with NBP’s producers to create a product that would meet the interests of both consumers and producers that would serve additional employee life insurance needs.” For additional information on Fidelity Life products, call 866-710-1013 or visit www.fidelitylife.com . Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. BestWeek: NCOIL, NAIC Leaders Work to Bury Hatchet, Optional Federal Charter OLDWICK, N.J., Mar. 7, 2008—There is an old Washington adage, attributed to long-time Speaker of the House Sam Rayburn, in which he tells a young Democratic congressman, “The Republicans are our opponents. The Senate is our enemy.” That idea may also apply to the rival National Association of Insurance Commissioners (NAIC) and National Conference of Insurance Legislators (NCOIL)—their enemy is optional federal charter legislation. After long periods of tension and mutual recrimination, a certain detente has settled over their relationship, leaders of both organizations told BestWeek U.S./Canada. “There’s definitely been a thaw in this whole thing,” said NCOIL President Brian Kennedy. “There’s a lot more openness that’s taken place here. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Georgia General Assembly Passes Key Auto Reform Measure Bill Includes Rating Reform, Fixes Two Adverse Court Decisions and Provides Stacking Option ATLANTA, March 6, 2008 -- Taking a major step toward a more competitive auto market, the Georgia General Assembly passed a measure today allowing file and use for private passenger auto rates above the mandated minimum liability limits, according to the American Insurance Association (AIA). Prior approval would still be required for auto rates up to the minimum limits. SB 276 now goes to the governor. www.aiadc.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. NAMIC Urges Georgia Governor to Sign Pro-consumer Auto Reform Legislation INDIANAPOLIS (March 7, 2008) – Georgia auto consumers should see more competition on auto insurance thanks to legislation approved by the state Legislature. The rate modernization language adopted this week provides rating reform and more choice for policyholders in their uninsured motorist coverage. “SB 276 allows insurers to set rates for private passenger motor vehicle insurance, other than the mandatory minimum limits, without approval of the insurance commissioner,” said Liz Reynolds, NAMIC’s Southeast state affairs manager. “Market competition will ensure that rates accurately reflect loss costs, which benefits consumers.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. The Hartford Expands Vault Program into New Cities, Offers Discounts to Encourage Greater Participation Group disability insurance training helps producers grow skills, book of business SIMSBURY, Conn. – The national economy is shaky. Competition for market share is fierce. Clients are cost-cutting. It’s tough times all around, but now can be a good time to sharpen your skills, boost your knowledge, and be ready to take advantage of a positive upswing. Graduates of The Hartford’s Vault program, an in-depth three-and-one-half day continuing education program on group short- and long-term disability insurance, say it gives them the knowledge and tools to create benefits plans that match an employer’s unique needs – and thus grow their own business. “As a 15-year insurance sales veteran, this program really filled in some gaps in the way we will sell and service our disability insurance programs,” said Vault graduate Ed Lee, president and CEO of ELT Insurance Services of San Diego, Calif. “I believe we will retain and win more accounts because of our participation in the Vault program.” To encourage greater participation this year, The Hartford Financial Services Group, Inc. (NYSE:HIG) has expanded its Vault program, offering special discounts and adding new cities to its 2008 schedule: April 7-10 in Palm Springs, Calif. May 20-23 in Charlotte, N.C. June 9-12 in Boston Sept. 29-Oct. 2 in Chicago Oct. 14-17 in Dallas http://www.thehartford.com/vault Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Fewer U.S. Companies Planning Big Job Cuts: Survey Fri Mar 7, 2008 5:42pm EST NEW YORK (Reuters) - Fewer U.S. companies are planning large-scale job cuts in response to a slowing economy than in past downturns, according to an upcoming survey of human resources executives by the Towers Perrin consultancy. While most HR executives are "very concerned" about the impact of the U.S. economic climate on their company's performance, most also say they are prepared to deal with that impact, in part through targeted job cuts. About 41 percent said they are likely to carry out small-scale, targeted job cuts aimed at reducing administrative costs, but not affecting revenue-producing parts of their companies, according to the survey, provided to Reuters ahead of its release next week. Some 11 percent anticipate large-scale workforce reductions, said Don Lowman, Managing Director of the human capital group at Towers Perrin. Reporting by Nick Zieminski, editing by Leslie Gevirtz) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
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21. Kmart To Offer $1 Aspirin With Prescription Buy Fri Mar 7, 2008 2:23pm EST ATLANTA (Reuters) - Retailer Kmart, looking to lift sales as the slowing U.S. economy hurts traffic, is planning to offer aspirin and other common medications made under its private label brand for $1 with the purchase of new or refilled prescriptions at its stores. Kmart, a unit of Sears Holdings Corp (SHLD.O: ), said that the program is launching in Florida this month and will spread to other states in April. The program will initially include 10 over-the-counter drugs sold under Kmart's American Fare brand, but that number could increase in the future, the company said. Medications in the program include ibuprofen, children's pain reliever, nasal decongestant, cough suppressant and cold and allergy tablets. The retail price of the 10 products in the program ranges from $1.49 to $4.49. (Reporting by Karen Jacobs, Editing by Gerald E. McCormick) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Carlyle Affiliate Warns On Cash After Margin Calls Fri Mar 7, 2008 9:34am EST By Alexandra Hudson and Mathieu Robbins AMSTERDAM/LONDON (Reuters) - A Dutch-listed affiliate of private equity firm Carlyle Group CYL.UL said on Friday it had received additional margin calls from lenders and warned its cash could run out. Carlyle Capital Corporation (CCC) said it received more margin calls and default notices from lenders since Wednesday when it reported receiving demands for extra collateral to cover market positions totaling over $37 million. Its latest margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital, CCC said in a news release. "At this stage the liquidation of the fund cannot be excluded nor the potential loss of its capital, rendering the shares worthless," Bear Stearns analyst Keith Baird said in a note. Even more securities could be liquidated by lenders, CCC said, adding the company was in discussion with its banks regarding its financing and considering all available options. The Dutch market regulator (AFM) suspended trading in CCC stock after its shares closed on Thursday at $5, having lost more than half their value. Carlyle Group has a $150 million exposure to CCC through a credit facility. A spokeswoman for the buyout firm on Friday refused to say whether Carlyle would provide more support to (Additional reporting by Gilbert Kreijger; Editing by Catherine Evans and Jason Neely) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Ambac Raises $1.5 Billion: Source Fri Mar 7, 2008 3:32am EST By Dan Wilchins NEW YORK (Reuters) - Bond insurer Ambac Financial Group Inc (ABK.N: ) sold $1.5 billion of shares and convertibles on Thursday, a market source said, protecting the company from ratings cuts but not satisfying some analysts who wanted the company to raise more. Ambac sold $1.25 billion of common shares at $6.75 a share, or 9 percent below their closing price on Thursday, the source said. The stock offering nearly tripled the number of Ambac shares outstanding. The company also sold $250 million of mandatory convertible securities, paying 9.5 percent per year and with a conversion premium of 18 percent. Those securities convert to shares beginning in 2011. The bond insurer needs to shore up its capital base as it faces big expected payouts from guaranteeing subprime mortgage bonds and other risky debt. Rating agencies said on Wednesday that they would likely affirm Ambac's top ratings if it successfully issued securities. (Editing by Louise Ireland/Alan Raybould) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Allianz To Start Selling Life Insurance In Japan FRANKFURT, March 7 (Reuters) - Allianz SE (ALVG.DE: ) will start selling variable annuity products in the world's second-biggest life insurance market, Japan, next month and is close to announcing a sales partner for the business. Allianz subsidiary Allianz Life Insurance Japan Ltd. was granted an insurance licence by the Japanese Financial Services Authority on Friday, the company said. Allianz already sells property-casualty insurance and offers banking and asset management services in Japan. (Reporting by Jonathan Gould; Editing by Erica Billingham) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. UK Proposes Shake-Up Of Lloyd's Of London Governance Fri Mar 7, 2008 7:13am EST LONDON (Reuters) - Britain's government plans to ease restrictions on governance of Lloyd's of London as part of efforts to modernize corporate governance at the insurance market, it said in proposed legislative changes on Friday. The government, which began a three-month consultation process on Friday, has been working with Lloyd's to identify areas where its corporate governance lags the most up-to-date practices elsewhere in the business. The proposals will amend the 1982 Lloyd's Act currently governing the market, its rules and management structure, particularly the 18-member governing council, which regulates and supervises market business. Proposed changes include scrapping a requirement for the Bank of England to approve appointments of nominated members of the council, removing restrictions on elections to the council and streamlining the council's delegation powers. It will also allow Lloyd's to jettison old committees no longer in use. Friday's move is part of a wider initiative to maintain the London insurance market's competitiveness in the face of other insurance centers, such has Bermuda, which has attracted a string of market heavyweights, from Hiscox (HSX.L: ) to Kiln (KIN.L: ), with lower tax and lighter regulation. Lloyd's said it welcomed the proposals. "They represent an important package of measures that will help Lloyds comply with modern standards of corporate governance and develop the business without the constraints of outdated statutory restrictions," a spokeswoman for the market said. The consultation period ends on May 30, but it could be another nine months before the changes are passed by parliament. (Reporting by Clara Ferreira-Marques, editing by Will Waterman) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. ANALYSIS-Stan Life Must Spell Out Strategy to Revive Shares Fri Mar 7, 2008 3:01pm EST By Clara Ferreira-Marques LONDON (Reuters) - British insurer Standard Life (SL.L: ) must send a clear message on its strategy, muddied by a failed bid and questions over its top management, if it is to revive its underperforming shares. Investor perceptions were unsettled last year by the takeover bid for rival Resolution (RSL.L: ), leaving the market unsure of Standard Life's direction. The unexpected move -- which followed months of saying it was focused on organic growth -- has raised questions about its underlying health. "The problem with the Resolution deal was that it killed the shares. They haven't recovered and they are a long way off," analyst Kevin Ryan at ING in London said as the insurer prepares to deliver results next week. "My view is that no one will trust them until we get a clearing of the air -- or until very many years have passed." (Reporting by Clara Ferreira-Marques; Editing by Andrew Callus) © Reuters 2008 All rights reservedReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Bond Insurer CIFG Loses Top Rating from Moody's Fri Mar 7, 2008 1:02am EST NEW YORK (Reuters) - Moody's Investors Service on Thursday cut its top ratings on bond insurer CIFG Guaranty in what could be a crippling blow to its business, citing "significant" exposure to risky residential mortgage-backed securities. Moody's cut CIFG's insurance financial strength rating four notches from "AAA" to "A1," the fifth-highest investment-grade rating. The outlook is stable, indicating an additional downgrade is not anticipated over the next 12 to 18 months. As of March 31, 2007, the last period for which information is available on the company's Web site, CIFG's holding company had guaranteed about $78.7 billion of debt. (Reporting by Karen Brettell; additional reporting by Dan Wilchins; Editing by James Dalgleish) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. KAMCO To Raise $1 Billion For U.S. Bad Debt Fri Mar 7, 2008 2:13am EST By Kim Yeon-hee and Lee Chang-ho SEOUL (Reuters) - Korea Asset Management Corp, a government debt clearer, is in the process of raising about $1 billion to buy distressed mortgages assets from U.S. banks and expects double-digit returns from the investment. The size of the planned fund is bigger than the previously announced $500 million as a number of foreign investment banks came forward to participate, Lee Chol-Hwi, KAMCO chairman and chief executive told Reuters in an interview on Friday. "It is possible to raise up to $1 billion...and we think the second half of this year, or around August or September, would be the best time to make the first investment," the former finance ministry director general said in his office. A spokesman clarified earlier comments from Lee, saying KAMCO was on course to raise $500 million by May or June, declining to give a timeframe for when the fund would reach $1 billion. Potential targets would be a block of distressed mortgage-linked loans held by U.S. financial institutions, and non-performing loans at financial services companies servicing Korean residents of Los Angeles. (Editing by Marie-France Han and Keiron Henderson) © Reuters 2008 All rights reserved Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. Why Group Health Insurance Is so Costly In Arizona We are constantly seeing studies proclaiming an ever increasing number of employers are not offering health insurance, dropping coverage, or having their employees pick up a bigger share of the premiums. Although this trend is not isolated to Arizona, we have one of the highest allowable group health insurance rate “surcharges” in the country. Under Arizona Revised Statute (A.R.S.) 20-2311 there is the “base rate” or the best rate that can be charged and an “index rate” or an “average rate.” This information has been compiled by Henry C GrosJean, who has been an independent agent since 1979. He had a bill sponsored, passed and signed by the Governor in 2007 that will standardize the health insurance questionnaire for all insurers. He can be reached at 623-435-8400 or Return to Headlines - - Print Article / Read Entire Article / E-Mail Article |
