"As a result, the suspension now is back in effect," the office of Insurance Commissioner Kevin McCarty said in a statement.

Florida's Office of Insurance Regulation suspended Allstate in January, saying it had not fully complied with a subpoena to testify about its property insurance business.

Florida investigators are trying to determine if Allstate and other insurance companies colluded to keep rates high.

The companies say Florida's vulnerability to hurricanes justifies high insurance rates.

The cost of insurance, coupled with sky-high property tax rates, ranks among the top concerns of voters and is one reason the state's once booming property market has imploded.

Florida Gov. Charlie Crist, a Republican who has displayed a populist bent, said he was "delighted" with the court's decision.

Crist said the state government and legislature had been seeking to create a more transparent and honest market for home property insurance and had now been joined by the judicial branch in their efforts to protect consumers.

"That's a beautiful thing because the people deserve justice and some of these insurance companies -- I should be cautious because some are doing very good work -- but some of them, like Allstate, have been horrific, let me put a fine point on it," he told reporters in Fort Lauderdale.

McCarty scheduled a news conference for later on Wednesday.

The suspension of the license applies to Allstate Floridian Insurance Co, Allstate Indemnity Co, Allstate Property & Casualty Insurance Co, Allstate Insurance Co, Allstate Floridian Indemnity Co, Allstate Fire and Casualty Insurance Co, Encompass Insurance Co of America, Encompass Indemnity Co, Encompass Floridian Insurance Co, and Encompass Floridian Indemnity Co.

The suspension prevents the companies from writing new policies in Florida. (Additional reporting by Jim Loney in Fort Lauderdale, reporting by Michael Christie; editing by Tim Dobbyn)

© Thomson Reuters 2008 All rights reserved

By Lilla Zuill

NEW YORK (Reuters) - Maurice "Hank" Greenberg, former chief executive of American International Group (AIG.N: ), has said the insurer is in "crisis" and urged a delay in its annual general meeting scheduled for Wednesday, according to a letter he sent to the board.

But AIG said late on Monday its board sees no need to postpone the meeting, according to a spokesman.

"Several top shareholders of AIG have called me expressing deep concern about the persistent and seemingly endless destruction of value at AIG," Greenberg said in the May 11 letter to the board, a copy of which was filed with the U.S. Securities and Exchange Commission on Monday.

AIG shares fell nearly 5 percent after news of the letter, with the stock ending the day at its lowest point since October 1998.

(Editing by Richard Chang, Phil Berlowitz)

© Thomson Reuters 2008 All rights reserved

NEW YORK (Reuters) - American International Group Inc (AIG.N: ) Chairman Robert Willumstad said on Wednesday the global insurance giant's directors stand behind Chief Executive Martin Sullivan, fending off concerns raised by investors frustrated by two quarters of record losses.

Willumstad, speaking at AIG's annual shareholder meeting, also denied that comments expressing concerns about management included in a Wall Street Journal story on Wednesday came from directors.

Still, Willumstad acknowledged the disappointing losses, which prompted former CEO Maurice "Hank" Greenberg to call on management to explain why it raised $11.9 billion of equity and convertibles -- deals that dilute existing shareholdings -- rather than shed assets.

"No one is pleased with the financial results and we would certainly expect them to improve," Willumstad said.

Sullivan told the meeting that AIG's efforts to raise new capital and bolster the balance sheet were going "better than expected."

(Reporting by Lilla Zuill, Writing by Joe Giannone; Editing by Andre Grenon)

© Thomson Reuters 2008 All rights reserved

By James Vicini

WASHINGTON (Reuters) - Mortgage fraud is an escalating problem in the United States, the FBI said on Tuesday in a report that cited the subprime lending crisis as a key contributing factor.

The FBI said it received 46,717 "suspicious activity reports" from financial institutions related to mortgage fraud last year, compared with 35,617 in fiscal 2006 and just 6,936 in fiscal 2003. The government's fiscal year begins on October 1.

The total dollar loss attributed to mortgage fraud is unknown. But 7 percent of the suspicious activity reports filed in 2007 indicated a specific dollar loss exceeding $813 million, the FBI said.

"The $813 million loss denoted in this report is just the tip of the iceberg, reflecting only a small percentage of financial damage suffered by victims of mortgage fraud," said Assistant FBI Director Kenneth Kaiser, who is in charge of the criminal investigative division.

"The FBI remains committed to working with our law enforcement, regulatory, and industry partners to unravel these complicated fraud schemes and bring their perpetrators to justice," he said in a statement released with the report that details mortgage fraud in 2007.

(Editing by Dan Grebler)

© Thomson Reuters 2008 All rights reserved

WASHINGTON (Reuters) - The U.S. Senate voted on Tuesday to extend until 2013 a federal program that insures millions of homes against floods and to forgive $17 billion in debt the program built up during Hurricane Katrina.

In an issue of concern to major insurers such as Allstate Corp and State Farm, the Senate approved renewing the National Flood Insurance Program (NFIP) in a 92-6 vote. Last week, it rejected adding wind damage coverage to the program.

The House of Representatives last year also voted to extend the program, but added wind coverage, and refused to forgive the debt. Negotiators from both chambers must now work out those stark differences in a compromise bill to send to President George W. Bush for his signature.

Bush has threatened to veto the House bill. The insurance industry opposes adding wind coverage to the program.

"Including wind coverage in the NFIP would likely have serious long-term repercussions for the program, from which it might not be able to recover," said Carl Parks, senior vice president for government affairs at the National Association of Mutual Insurance Companies, an industry group.

Insurers argue that a wind add-on would expose the flood program to higher risks, a view backed up by a report last week from congressional investigators.

Insurers also say adding wind coverage would crowd them out of a viable business. But some lawmakers complain that it has become difficult to get wind coverage in coastal areas.

After Hurricane Katrina slammed into the Gulf Coast in August 2005, some devastated Gulf Coast homeowners accused insurers of avoiding big payouts by blaming damages on water and not wind, pushing claims onto the federal flood program.

The 40-year-old flood program will expire on September 30 unless Congress reauthorizes it, a deadline expected to propel negotiators for the Senate and House toward agreeing on a final version of a bill.

"We urge the House to work with the Senate to produce a bill that the Bush administration can sign into law," said David Sampson, president of the Property Casualty Insurers Association of America, another industry group.

Congress created the NFIP in 1968 to provide insurance that private companies would not offer.

Administered by the Federal Emergency Management Agency, it provides coverage through more than 90 companies that sell policies and collect premiums on the government's behalf for a fee. The premiums go to FEMA.

The Senate bill would raise the annual limit on NFIP premium rate increases to 15 percent from 10 percent. It would also push FEMA to make more progress on improving mapping of flood-risk areas and to adjust premium rates accordingly.

The legislation takes additional steps to bolster the NFIP's shaky finances and tighten up the handling of flood insurance policies by mortgage lenders and insurance agents.

(Additional reporting by Richard Cowan; Editing by Tim Dobbyn)

© Thomson Reuters 2008 All rights reserved

Gov. Racicot’s statement follows:

“We appreciate that an overwhelming bipartisan majority of the Senate was reasonable in its approach to reauthorizing and reforming the NFIP. AIA supports provisions in S. 2284 that increase funding to update the program’s flood maps, restructure its premium rates, expand mandatory coverage areas, and forgive the NFIP’s $17 billion debt. We also support the Senate’s provision establishing a nonpartisan commission as the most efficient and effective approach to assessing natural catastrophe risk management.

“The Senate also showed good judgment by not adding wind coverage to the NFIP and giving strong consideration to the findings of the Government Accountability Office study that warned of the operational challenges and possible financial consequences of adding wind coverage to the NFIP. Increasing the operational burden on the NFIP is unnecessary given that there is adequate wind coverage capacity in every state through either the traditional private market, or state residual markets backed by private insurers.

“AIA looks forward to working with the Senate and House to reconcile the differences in their NFIP reauthorization bills in a manner that improves the program and promotes fiscal soundness.” www.aiadc.org

“The Willis Building is a monument to our past, current and future success,” said Joe Plumeri, Chairman and CEO of Willis Group Holdings. “It represents our commitment to stand tall as the change agent in the global insurance industry, challenging the status quo and modernizing the way we all do business while finding new and innovative solutions for our clients.”

“The Willis Building is a first class space for our Associates and we are proud to welcome clients to our new home. It also demonstrates our long-term commitment to London as one of the world's leading financial centers,” said Mr. Plumeri.

Standing 410 ft high, The Willis Building features an elegant stepped design and modern glass exterior. The striking new addition to the London skyline is the fourth tallest building in the City and is adjoined by a nine-storey building on Fenchurch Avenue which has been leased to other corporations.

Owned by British Land and developed by them in conjunction with Stanhope, The Willis Building received an “excellent” BREEAM (Building Research Establishment Environmental Assessment Method) sustainability rating which measures the environmental impact of buildings. This is the highest possible score that can currently be achieved and is given to less than one in five newly completed buildings.

Paul Burgess, Head of London Leasing at British Land, said: "The Willis Building is a great new landmark for the City. It's a superb new UK headquarters for Willis with tremendous presence right opposite Lloyd's and meets the highest standards for sustainability. The new building has opened up the whole area and enlivened it with shops and cafés. It really is the heart of the insurance sector. It embodies perfectly our approach of working in partnership with our occupier customers to create buildings that both support and enhance their business."

Exciting features of The Willis Building include:

Open architecture on all the floors and a “no office door” policy encourages teamwork and affords an expansive and light working environment that gives outside views to everyone.

Two scenic terraces on the 16th and 23rd floors feature unparalleled views across London.

The Client Advocate restaurant on the 23rd floor is used for private client dining and entertaining and reflects Willis’ philosophy of being a true advocate for its clients’ best interests. The Associates’ restaurant - the One Flag Café - on the 15th floor is named after the global teamwork culture that Willis is famous for.

a Wellness Center featuring a full-service gym and medical facilities.

A 375 seat state-of-the-art auditorium.

Cutting-edge technology including wireless zones, plasma screens, video conferencing rooms and IP telephony throughout.

A tree-lined public plaza around the base of the building with bustling cafés and restaurants.

www.willis.com.

RMS has been working with its scientific partners in China, the Institute of Engineering Mechanics (IEM), to assess the damage from Monday’s event.  Though the earthquake was centered in a relatively sparsely populated area, it was powerful enough to cause damage in Chengdu – 90 kilometers from the epicenter and China’s 10th largest city by gross domestic product (GDP) - where more than 30 Fortune 500 companies and 12,000 domestic organizations are situated.

Although only a fraction of the property loss will be borne by the insurance industry, this earthquake is still likely to cause the highest insured losses in the country to date.  Insurance penetration varies significantly by line of business, ranging from negligible for residential property, over 50% for high-end commercial buildings in Chengdu and full coverage for the industrial facilities owned by multinational companies.  www.rms.com

AIR cautions that there is a high level of uncertainty in insured loss estimates in China. The insurance market is rapidly developing and earthquake coverage is optional for both residential and commercial policies. AIR estimates that insurance take-up rates in this region (the percentage of buildings actually insured against the earthquake peril) are minimal for residential properties and only marginally higher for commercial properties. Although earthquake coverage is mandatory for policies covering construction projects (the CAR/EAR line of business), in many cases companies do not purchase insurance for smaller projects.  www.air-worldwide.com

The Fitch report discusses the major parties on both sides of the debate and their views regarding the effects of increased federal regulation on the insurance industry. While neutral as to the ultimate passage of OFC regulation, Fitch highlights possible ratings implications that could result from the passage of OFC regulation.

The Special Report, 'Optional Federal Charter: Will Treasury Support Promote Passage', is available on the Fitch Ratings web site at www.fitchratings.com under the following headers: Financial Institutions then Insurance then Special Reports.

CHICAGO, May 12, 2008 /PRNewswire -- Aon Corporation (AOC) , the leading provider of global risk management and consulting services, today released an analysis of liability in the long term care industry, finding for the first time in nine years of reporting that liability costs are stable on a national average basis.

The Long Term Care 2008 General Liability and Professional Liability Actuarial Analysis, with the endorsement of the American Health Care Association (AHCA), utilized data representing 15 percent of the total number of long term care beds in the United States

The study found that average general liability and professional liability loss costs nationwide are at approximately $1,460 per bed after peaking at $2,030 per bed in 1998. This trend is driven by a reduction in the average severity of claims from a high of $261,000 in 1998 to $138,000 in 2007. In addition, the number of claims (frequency) has stabilized in recent years -- hovering around 10.6 claims per 1,000 occupied beds after rising from 6.7 claims in 1997.

"The impact of tort reform has been lasting, but it is not the only factor contributing to the stabilization of liability costs in the long term care sector," said Theresa W. Bourdon, managing director and actuary for Aon Global Risk Consulting. "Many other changes, including the withdrawal of some long term care facilities operators from expensive markets, more effective defense strategies, the use of arbitration for claims settlement and significant improvements in quality of care, have combined to help alleviate the liability crisis."

The complete study, including detailed analysis for 13 states, can be purchased for $350 by visiting http://www.ahcancal.org. For more information, go to http://www.aon.com. 

SINGAPORE (Reuters) - JPMorgan Chase & Co will begin trading physical oil by year-end, increasing its exposure in a market that could rise to $200 a barrel, the bank's global head of commodities said on Wednesday.

The bank plans to expand in commodities and energy trading, Blythe Masters said, despite expectations of job cuts in other areas as it prepares to take on staff from Bear Stearns at the same time it deals with turbulent financial markets.

"We will start trading in physical oil and refined products by the end of this year," she told Reuters in an interview.

JPMorgan will join a growing list of investment banks from Goldman Sachs to Barclays Capital seeking to boost profits on their big derivatives trading desks by gaining a foothold in physical markets.

JPMorgan came under fire in March after it acquired a nearly insolvent Bear Stearns with involvement of the Federal Reserve and at a fire-sale price. It expects to complete its takeover of Bear around June 1.

The bank could cut as many as 4,000 of its own employees worldwide as it prepares to take on staff from Bear, people familiar with the situation said on Tuesday.

(Editing by Ben Tan)

© Thomson Reuters 2008 All rights reserved

"The total number of U.S. properties with foreclosure activity in April was the highest monthly total we've seen since we began issuing the report in January 2005," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.

In March, home foreclosure filings had risen 5 percent from February.

The surge in foreclosures indicates an increasing number of homeowners are struggling to make mortgage payments amid the worst U.S. housing market downturn since the Great Depression.

(Reporting by Julie Haviv, Additional Reporting by Jim Christie, Editing by Chizu Nomiyama)

© Thomson Reuters 2008 All rights reserved

"No question, there should be a strong bias in favor of equities," Seigel told a group of independent wealth managers in New York on Tuesday.

"It's not that I haven't seen the stock market cheaper ... it's that there is no competition from Treasuries," said Siegel, a noted professor at the University of Pennsylvania's Wharton School.

Figures back Siegel's argument. As of Friday, the S&P 500 index .SPX was sporting a price-to-earnings ratio of 15 times this year's estimated operating earnings and 21.8 times estimated reported earnings, respectively, Siegel said.

The index's operating earnings yield, a tool for comparing equity valuations with bonds, is 4.6 percent, topping the 3.9 percent yield on the 10-year U.S. Treasury note and matching the 30-year bond's yield.

When forecasts for 2009 reported earnings are used, the S&P's earnings yield stands out at 8.1 percent, Siegel said.

Siegel said U.S. equities had a run for their money in the mid-70s when Treasury yields were trading at eye-popping double-digit levels.

"Today, there is none of that with where government bonds are trading," he said, speaking at the semi-annual conference of Focus Financial Partners, a network of independent wealth management firms with about $28 billion in assets under management.

Siegel should know: His book, "Stocks for the Long Run," now in its fourth edition, made an argument five years ago that investors should consider ramping up their exposure to international equities.

Indeed, they have become one of the more remarkable performers during the current credit crisis.

(Reporting by Jennifer Ablan in New York; Editing by Jonathan Oatis)

© Thomson Reuters 2008 All rights reserved

U.S. households will get tax rebates next month as part of a $152 billion stimulus package passed earlier this year, aimed at propping up an economy hit by the subprime mortgage crisis, losses at top banks and a credit crunch.

"I still maintain the business cycle is bigger than the government," Merrill's North American economist David Rosenberg said at a client conference in Singapore.

He said the world's largest economy was already in recession as consumer spending and confidence had fallen and jobs losses were rising, with the number of hours worked having fallen sharply.

Describing housing as "the quintessential leading indicator", Rosenberg, a long-time bear on the U.S. economy, said he expected home prices to fall another 15-20 percent before stabilizing.

He also predicted inflation in the United States would slow as consumer spending weakens, and that the Federal Reserve would be forced to cut rates further to deal with the recession.

"No asset class security is priced today for a recession scenario," Rosenberg said, which is why he was bullish on U.S. Treasuries but bearish on stocks.

(Reporting by Kevin Lim, Editing by Jacqueline Wong)

© Thomson Reuters 2008 All rights reserved

Established in 1994, Specialty Risk, Inc. is a retail insurance broker providing risk management and commercial property/casualty insurance products and services to their clients throughout North America. They specialize in Occupational Accident Insurance, Corporate and Fleet Workers Compensation, Physical Damage and Non-Trucking Liability Insurance for Independent Contractors, Fleet and Company Drivers, and Motor Carriers in the transportation field. Jamie Krisman and her associates will continue to operate in their current location under the direction of Michael Henthorn, South Central Regional Manager of Gallagher's Retail Property/Casualty Brokerage Operation. http://www.ajg.com/ 

Friday, 9 May 2008

Columbia, Mo— Shelter Mutual Insurance Company and Haulers Insurance Company Inc. have agreed that Shelter will acquire 100% of Haulers’ common stock for an undisclosed amount. The acquisition is subject to regulatory approval.

Shelter is a financial group of companies’ located in Columbia, Missouri; while Haulers is a predominantly personal lines insurer located in Columbia, Tennessee.