infoinsurance

Auto Insurance Rates

2009-05-03T23:46:00.000+07:00

by: Sher Matsen
will vary depending on the insurance agency, your driving record, and the type of insurance you are looking to purchase. I you are looking for affordable car insurance or truck insurance then read on.

There are ways to reduce your premiums without giving up coverage. One of the easiest things to do is get auto insurance rate quotes online. This will allow you to comparative shop stress free.

Raising your deductibles is the easiest way to reduce your rates. The higher the deductible, the lower the premium will be. The deductible is the portion you will have to pay in the event of accident, before your insurance coverage steps in. It’s important not to carry a deductible that’s more than what you are able to pay. Your insurance company will not honor its portion of the claim until you’ve paid your deductible. However, the higher your deductible the lower your premium cost will be, so you need to find a

Always remember to ask your insurance broker for any available discounts. Quite often we forget to ask and they don’t seem to volunteer the information. A clean record on the current policy for a certain period of time, having your homeowner's coverage with the same insurer, taking a defensive driving course, having an accident free driving record, and having an approved anti-theft device will reduce your auto insurance rates.

The type of car you drive can also reduce your rates. Stay away from cars that have a high class rating. Rates vary among the different makes and models of vehicles. The different rates are based on the risk of accident, cost to repair, higher theft rates for a particular model and replacement costs such as with a new vehicle. So be sure your vehicle isn’t going to be in a category that increases your rates too much.

A safe driving record consisting of no accidents and no traffic violations will get you the most substantial discount. Most insurance companies are very good at recognizing good driving habits. These are the drivers they want to insure because their risk is much lower.

If the car is old and not very valuable, comprehensive insurance is probably not worth buying as it can quickly add up to more than you’d ever receive in the event of an accident. You can save up to 20% by eliminating collision insurance. You may want to opt not to carry collision insurance as well which can save you and additional 20%.

Check around to make sure you are getting the best auto rates you can. Online auto insurance shopping has taken the guess work out of buying insurance and you can very quickly see if you are being hosed. So if your insurance is coming due now is the time to start shopping!.

About the author:
Sher from The Auto Insurance Center has been serving customers for over 20 years. Please visit us at http://www.all-auto-insurance.com/

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Lehman Debt Auction Gives Clue to Potential Insurance Payouts

2008-10-14T09:34:00.000+07:00

Sellers of insurance on bonds issued by bankrupt Lehman Brothers Holdings Inc. are now likely to face demands that they pay out more than 91 cents on the dollar to buyers of those insurance contracts.

That's the upshot of an unusual auction process Friday that established the price for defaulted Lehman debt, and in turn potential claims payouts on insurance protecting that debt, known as credit default swaps.

Certainly, some firms will take a hit because of the pricing, potentially amounting to billions of dollars in combined losses. In the Lehman auction, participants included most major financial firms from around the world. But it's too early to tell which companies will be on the hook or for how much.

"Where this is helpful is this is the first real-world situation where we see how market participants handle settling CDS,'' said Barry Silbert, chief executive of SecondMarket Inc., a marketplace for trading illiquid assets.

In a best-case scenario, Silbert said, financial firms that sold CDS contracts would make their payouts in the coming weeks, have enough capital to cover all the positions, and take their losses and move on. In a worst-case scenario, sellers of the swaps would not have the cash to make the payments and would have to liquidate their assets to cover their positions.

"The next two weeks will be very telling,'' Silbert added.

The auction set the price on $4.92 billion of debt issued by now bankrupt Lehman at 8.625 cents on the dollar. Lehman bonds had been trading near that range in the past few weeks, meaning Friday's auction price further reinforces current market values for the debt and in turn the credit default swaps.

"Since (the auction price) was not that far off from where bonds were trading, the hope is banks and funds with CDS exposure have prepared for the cash payout,'' Silbert said. "There is no longer much of a debate on what the claims are worth.''

Indeed, with the price set for the Lehman debt, uncertainty surrounding losses tied to those swaps should dim, providing banks more comfort with a portion of theirs and others' balance sheets.

Credit default swaps have played a prominent role in the mushrooming credit crisis that in the past month led to Lehman filing for bankruptcy protection, a government rescue plan for insurer American International Group Inc. and Merrill Lynch & Co. selling itself to Bank of America Corp.

The government bailout of AIG was necessitated in part because of the insurer's sales of CDS. Had AIG failed, it could have triggered billions of dollars in losses at many other banks and financial firms who bought swaps from AIG, sending them into failure as well.

The market for swaps, which is unregulated, is huge: estimated at as much as $62 trillion. While little-known to many individual investors, they are commonly used contracts to insure against the default of financial instruments such as bonds and corporate debt.

What is deemed the riskier, and likely larger portion of the swaps market, are swaps bought and sold as bets against bond defaults -- a buyer doesn't necessarily have to own a bond to buy the CDS that insures it. In such cases, investors use swaps to essentially place bets on a company's performance, similar to shorting a stock -- the move is purely speculative, as the investors are betting only on whether a bond or security will be paid off or fail.

Sellers of swaps have to make buyers whole on the price of the underlying debt if a company goes bankrupt or fails to repay the debt. In the case of Lehman, setting a price for the debt at 8.625 cents for every $1 now means any company that sold swaps tied to Lehman debt theoretically must pay out the remaining 91.375 cents for every $1 on the contracts.

Because credit default swaps are two-party contracts, there will be no net loss of wealth. For every company that takes a loss, there will be a corresponding gain elsewhere. The question remains which companies will be on the hook to make payments and take losses, and will they have the funds to cover such losses.

Amid the ever increasing blame CDS markets have taken for spurring the credit crisis, the Federal Reserve Bank of New York on Friday hosted a second meeting with market participants to try and accelerate the process of creating a centralized clearinghouse for trading swaps.

Earlier last week, CME Group Inc., an exchange operator, announced plans to launch an electronic trading platform with Citadel Investment Group LLC for the trade of credit default swaps.

Over the past month, state and federal regulators have increasingly called for oversight of the swaps market. Securities and Exchange Commission Chairman Christopher Cox urged Congress last month to begin regulating the market for CDS contracts.

Cox's testimony calling for the regulation of the swaps market came a day after state regulators in New York said they will begin in January to oversee the portion of the market in which the buyer of a CDS actually owns the bond or debt, considering them akin to a traditional insurance policy like one taken out on a home.

The New York state policy would force financial firms to register with the state, face more oversight and hold adequate reserves to ensure they can cover any payouts.

www.insurancejournal

HSBC Insurance Brokers Receives Qatar Financial Center License

2008-10-11T18:19:00.000+07:00

HSBC Insurance Brokers Limited announced that it has established a branch office and received regulatory approval from the Qatar Financial Center (QFC) Authority to provide insurance broking services to corporate customers within The State of Qatar.Steve Bonynge, Managing Director HSBC Insurance Brokers (Middle East), noted: "Qatar is an important and growing Insurance market and we are delighted to be joining the QFC. We look to contribute to the development and growth of the Qatar Insurance Market by bringing over 30 years of experience within the Middle East as well as our International technical capabilities and resources for the benefit of the Qatar business community."

Stuart Pearce, CEO and General Director QFC Authority, added: "The QFC has attracted a wide range of local, regional and international financial institutions, largely because of its world class legal and business environment together with the undeniable opportunities for firms to bring new capacity into Qatar's growing financial services sector, as well as to the region as a whole. We see insurance and reinsurance as key growth areas for Qatar offering high potential to firms such as HSBC Insurance Brokers, who will play an important role in deepening the sector and contributing to the economy."

The bulletin also indicated the newly opened branch in Qatar is the latest in HSBC's expansion plans within the Middle East region. It presently provides insurance broking and consultancy services across the region from offices within The Kingdom of Saudi Arabia and the United Arab Emirates.

Source: HSBC Insurance Brokers - www.hsbc.com/insurance

Is ID Theft Insurance Worth Recommending to Agency Clients?

2008-10-10T06:31:00.000+07:00

A client concerned about identity theft might consider moving to the Dakotas.It's best to stay away, however, from Arizona, California, Nevada, Texas, Florida and New York. All of these states reported that more than one out of every 100 persons was the victim of identity fraud last year. In the sparsely populated Dakotas, the rate is less than one-third of 1 percent, according to the Federal Trade Commission.This may be interesting, but not particularly helpful. The question most clients have is how vulnerable they are to identity theft and the likely cost if they become a victim.

When it comes to ID theft insurance, the name is something of a misnomer. Too many people think that if someone steals money from their bank account, the insurance company will repay them. But this is not true for most policies. The typical ID theft insurance policy will not pay for stolen money but only for expenses associated with straightening out the mess. Actual losses require a separate very specific policy.The Costs in Time and Money
Statistics on time and costs are inconsistent.

• Almost 600 hours and $1,400 in out-of-pocket expenses, not including lost wages, according to the Identity Theft Resource Center in San Diego.
• $422 in out of pocket expenses and 25 hours, says Javelin Strategy & Research, a Pleasanton, Calif., research company focused on financial service topics. However, two-thirds of victims have no out-of-pocket costs.
• 81 hours, according Nationwide Mutual.

But Robert Burke, now manager of the online banking testing team for Bank of America, estimates that a former roommate cost him at least $12,000 and thousands of hours over a 10-year period after he stole Burke's identity. This is the sort of story that fuels ID theft insurance sales.

The good news is that both the number of victims and the dollars lost appear to be declining. A Javelin survey showed identity-fraud losses dropping 11.8 percent in 2007, to $45 billion. It tallied 8.4 million victims of identity fraud as of late 2006, down from 8.9 million the year before and 10.1 million in 2003.

Nevertheless, last year identity theft topped the list of consumer complaints filed with the Federal Trade Commission, accounting for 36 percent of the total.

Whatever statistic is correct, the major cost is the hassle factor -- the hours spent talking to creditors, credit reporting bureau and law enforcement agencies that tend to give identity theft a low priority compared to violent crime. There can be the intangible costs of denied loans or higher interest rates because of mistaken identities. Some people say they have been turned down for new jobs.

Why Group Policies Are Popular
The hassle factor is why a small percentage of employers offer identity theft insurance as a benefit, particularly since corporations often pay premiums of less than $3 a year per employee.

It makes sense as an employee benefit. It's hard to imagine resolving an identity theft situation without some telephone calls during working hours. In addition to maintaining productivity, insurance is an inexpensive way to offer a little bit extra to employees.

Overall, about 3 percent of employers nationwide provided ID theft insurance, according to a 2006 survey by Aon Consulting. The number is expected to rise.

Metropolitan Life Insurance Co. said 55 of the Fortune 100 companies included an ID theft option last year. It offers ID theft restoration services at no additional charge to customers who take auto or home insurance products as a voluntary benefit through their employers.

Other frequent purchasers of group policies are banks and credit unions. Citibank, for example, offers customers free ID theft recovery service, and MetLife has extended its coverage to customers of its online MetLife Bank. ID Theft 911, which provides restoration services, signed up 130 credit unions and community banks in 2006. As of this year, the company says it covers more than 11 million households in various programs.

Travelers and AIG are the largest writers of group ID theft expense reimbursement policies.

Sources for Individual Policies
Outside the corporate workplace, endorsements to homeowner's insurance, providing identity theft expense reimbursement, are usually available. These generally are not underwritten in the traditional sense; the policy is issued with little investigation or consideration of exposures. They typically cost $50 to $70 for $15,000 to $25,000 in coverage.

Some companies, such as MetLife and Grange, offer identity theft protection at no extra charge with a homeowner's policy. Others, such as Allstate and Travelers, sell it as a stand-alone policy or as a rider. Chubb Group of Insurance Cos. and others have partnered with Identity Theft 911 to help customers recover or recreate missing personal documentation after a disaster or theft, and cover up to $25,000 in expenses with a $500 deductible.

Critics Say It Isn't Worthwhile
One question, posed by Canadian Underwriter last year, is this: If identity theft is apparently so prevalent, why is the pricing so modest?

The answer, some contend, is that ID theft insurance has little value, due to the scope of coverage provided. Consumer Reports and the Privacy Rights Clearinghouse in the United States, as well as the Public Interest Advocacy Centre in Ottawa, are among the skeptics. Beware, they say, of deductibles that may be higher than likely expenses. Coverage for attorneys' fees may be valuable, as long as purchasers understand that prior approval usually is required.

Another red flag is the fact that if a bank or retailer is proven negligent, any existing cyber liability insurance would likely respond to customers' claims, subject, of course, to policy limits and language. However, recent surveys from the Computer Insurance Institute (www.gocsi.com) show that more than 70 percent have not purchased such insurance.

To further complicate matters, many policies, including individual and group insurance for expense reimbursement, contain "other insurance" language, making the individual's insurance excess over other collectible insurance. That is normal, but delays in claims adjustments just prolong the victim's financial pain.

"Identity theft insurance can be a good thing," said Jay Foley of the nonprofit Identity Theft Resource Center in an article in the Cleveland Plain Dealer. A key element of a good policy, he believes, is coverage for lost income for time off work.

Actual Financial Losses
Identity theft policies generally do not cover such financial losses as fraudulent charges or over-limit or nonsufficient funds fees. Insurers expect banks or credit card companies to erase these expenses. But the consumer still may want protection with a policy covering actual financial losses.

These are distinct from the individual ID theft expense reimbursement insurance, and include specific coverage for the actual financial loss. The best-known example of this product is a joint venture between Travelers and the American Safety Council. This product, which also is not underwritten, is issued immediately after a simple form is completed on the Web. There are several limits available. Although pricing is steeper than for the expense reimbursement coverage policy (and logically so), the cost is still reasonable.

It is available only on the Web at www.identitytheftpolicy.com. So far Travelers apparently has not been willing to allow its retail agency force to market this product. [Writer's Note: I recently purchased a policy limit of $30,000, with no deductible, for an annual premium of $79. Again, the attraction of this particular policy is coverage for incurred financial losses, as well as associated costs and expenses. If someone wants quality insurance from a highly regarded insurer and a realistic premium, this product is one to consider.]

So who really needs ID theft insurance?

People earning more than $150,000 a year are the most likely targets, according to Javelin. Those who earn less than $15,000 are most likely to suffer long-lasting damage, as they usually have fewer resources to use in repairing their credit standing. Young adults between 18 and 29 are the most frequent victims, probably because they are the least likely to take such safeguards as shredding documents and using firewalls on computers. The Identity Theft Resource Center last summer suggested that college students take a crosscut shredder and a lock box large enough to hold a laptop, loaded with current security software.

What Are The Alternatives?
Given this background, the consumer may prefer to focus on prevention services that are designed to make personal information almost unavailable through credit bureaus. Others focus on rectifying an ID theft, should one occur.

Diverse entities are getting involved. The large grocery store chain Kroger endorses a specific service that can be activated by calling a toll-free number or on the Web, and prepaying a fee for ID theft resolution services.

On the other end of the spectrum are prevention services such as LifeLock (www.lifelock.com), currently being promoted by a major national advertising campaign. Lifelock "guarantees" that it will eliminate public access to personal information except with the specific permission of the individual. If an identity theft still occurs, LifeLock promises to pay all costs up to $1 million

Its reputation has been somewhat tarnished by two recent lawsuits and the discovery that a Texas resident managed to get an online payday loan operation to lend him $500 using the LifeLock CEO's Social Security number, which he had listed in ads promoting the effectiveness of his service.

In an Arizona lawsuit plaintiffs claim the $1 million guarantee is misleading because it only covers a defect in LifeLock's service. A California lawsuit by the Experian credit bureau accuses LifeLock of deceiving consumers and abusing the system for attaching fraud alerts to credit reports.

A similar service is IdentityGuard (www.identityguard.com), which monitors Internet "back alley" communication and chat rooms.

Trusted ID (www.trustedID.com) combines prevention and resolution services, with monitoring of credit information, and risk assessment. These services generally cost from about $10 to $15 per month.

At least one of the credit reporting bureaus, Experian, offers a subscription services (www.freecreditreport.com) that provides credit reports and other basic services to consumers. Consumers already can receive free credit reports through the federal government's Web site, www.annualcreditreport.com, but the confusion between services that require a fee and those that are free is understandable.

Other resolution/recover services include Trust (www.mytruston.com) and ECredit Freeze (www.ecreditfreeze.com).

Also worth considering are services such as Pre-Paid Legal Services Inc. (www.prepaidlegal.com), where the focus is not necessarily remedying ID theft but addressing a variety of potential problem areas. Some of these products are sold as group insurance products.

ID Theft Specialists
Finally, ID theft has produced new career opportunities in insurance. The Institute of Fraud Risk Management is offering a new professional designation -- Certified Identity Theft Risk Management Specialist (CITRMS) -- that can be earned through study materials and passing a series of related exams. [See www.tifrm.com for additional information and enrollment forms.] Most holders of the designation work for financial institutions and government agencies, including law enforcement. Approximately 10,000 people have been certified.

It appears that the crime of identity theft is here to stay. The challenge is to be sure that clients truly understand the risks and the coverage. If they become a victim, brokers want to be certain that they have led them to an oasis, not a mirage.
www.insurancejournal.com

Conning Research: Challenges Looming for Homeowners Insurance

2008-10-09T06:47:00.000+07:00

The five-year period spanning from 2003-2007 served the homeowners insurance line favorably after the dismal 20-year period that preceded it, and return on surplus for the line averaged an estimated 11 percent for those five years. But while returns relative to risk still do not compare favorably with other major lines, this five-year period did represent a marked improvement in financial performance for the line, says a new report by Conning Research and Consulting.According to Conning Research, underwriting profitability for the homeowners insurance line was driven by improving loss costs and strong premium growth. A steady decrease in claim frequencies during this period combined with very light catastrophe years in 2006 and 2007 to provide a big boost to the line. Yet even in 2004 and 2005, when catastrophic events were a significant factor, improved catastrophe management on the part of homeowners insurers produced better results than history would have predicted. Homeowners insurance premium growth was driven by strong price improvements and equally strong exposure growth.

Yet, in its new study, Conning Research predicts the immediate future for the homeowners insurance line may not be as favorable.

"Looking ahead, the uneasy state of the U.S. economy creates a series of challenges for homeowners insurers over the next several quarters -- and likely the next few years," said Alan Dobbins, analyst at Conning Research & Consulting. "Conditions in the housing market will suppress growth as long as inventories remain at elevated levels and as values decline. Insurance-to-value will be adversely affected, and the threat of inflation could increase the cost of the average homeowners claim in the wake of declining premiums."

The Conning Research study, "The Homeowners Insurance Market: The Eye of the Storm," analyzes the economic and regulatory pressures on the line, as well as issues related to catastrophe management and distribution changes that will have profound effects on homeowners insurance in the coming years.

While homeowners insurance distribution has traditional gone the route of independent and exclusive agency channels, conditions are changing, say Conning Research analysts, possibly paving the way for a change in the way homeowners accounts are acquired.

"Changes in technology and in the relative importance of this line to insurers make such a change more likely. Significant challenges for such a shift remain, but the success of various insurers in reconfiguring the distribution function highlights the possibilities of such a shift from traditional methods," the report said.

"With the increased pressures on the homeowners insurance line associated with both the economy and regulatory issues, it is clear that insurers will need to manage carefully through the next few years," said Stephan Christiansen, director of research at Conning. "Our research indicates that those insurers who have innovated in technology and are willing to innovate in policy simplification and more sophisticated pricing approaches will be at a significant advantage in this challenging environment."

Source: Conning Research & Consulting,
www.conningresearch.com

Best Reports on Europe's Insurers

2008-10-09T06:44:00.000+07:00

"Non-life insurance premiums are flat or declining while claims costs are escalating in Western Europe's major markets," said a bulletin from A.M. Best. "Meanwhile, life insurers' growth is threatened by turmoil in the credit and equity markets. In Central and Eastern Europe, where many insurers from the West are seeking growth, some of the same pressures are coming to bear on the life and non-life markets."Best underlined "lackluster premium trends, rising claims costs and increasing damage awards" as having led to "deteriorating non-life underwriting results in Western Europe."

It also singled out an "upward trend in repair costs" that spans both the motor and property sectors, as well as the effects of catastrophes such as windstorms Kyrill in 2007 and Emma in 2008, as contributing to the raising claims costs

"Competition in motor markets has dampened premiums in Central and Eastern Europe, but steady car sales have had a mitigating effect," Best continued. "Growth has driven up expenses for insurers expanding in the CEE region, and some have adopted acquisition strategies as a means to control costs and gain scale."

In addition Best found that the "appetite for unit-linked life products is waning in Western Europe as credit and equity markets struggle, leaving life insurers vulnerable to competition from other savings products."

Pension reforms in France, Germany and Italy offer possible avenues of growth, though in practice, results have been mixed and depend on factors such as government tax policies.

The CEE region has provided steady growth for Western European insurers, though volatility in the investment markets may reduce the appetite for unit-linked products that have driven growth in life business.

Tax changes and pension reforms in CEE countries have boosted the attractiveness of life products, but penetration remains low compared with other European countries.

BestWeek subscribers can download a PDF copy of all full special reports or a combination of the report and all related spreadsheet files of the report data at no charge at: www.bestweek.com.

Nonsubscribers can visit the site for pricing information or call Best's customer service for more information at (908) 439-2200, ext. 5742.

Source: A.M. Best - www.ambest.com

Sullivan Group Forms Sullivan Brokers Wholesale Insurance Solutions

2008-10-07T19:15:00.000+07:00

The Los Angeles-based Sullivan Group has announced the formation of Sullivan Brokers, Wholesale Insurance Solutions Inc., a national wholesale brokerage firm with an emphasis on professional, management and health care risks. Sullivan Brokers combined the already established Sullivan Healthcare and the professional liability department of G.J. Sullivan Excess & Surplus Lines Company.Hank Haldeman, CEO of Sullivan Brokers, Wholesale Insurance Solutions Inc., has appointed Terrence Dwyer as president. Dwyer assumed the day-to-day management operations of the new company headquartered in the Sullivan Group offices located in Los Angeles.

"By combining the strengths of our professional brokering practices of Sullivan HealthCare West with the professional brokering staff of G.J. Sullivan Co. in Oakland and San Diego, Sullivan Brokers are can offer a broad range of professional brokering practices including all management liability products for public, private and non-profit organizations, all classes of professional and E&O liability, a broad range of health care liability lines and various other casualty lines. We will maintain and expand our binding authorities and immediately expand our brokering capabilities as opportunities become available," Dwyer said in a statement.

"Sullivan Brokers reflects the broader, wholesale vision of the senior leadership of the Sullivan Group, especially Pete Germain, who made this possible through his leadership of Sullivan HealthCare and will continue as a senior officer of Sullivan Brokers," Haldeman added.

Source: Sullivan Group

BNP Paribas Acquires Fortis Bank, Insurance Assets in Credit Crunch

2008-10-07T19:06:00.000+07:00

French bank BNP Paribas agreed to scoop up assets in Belgium and Luxembourg of banking and insurance group Fortis for €14.5 billion ($19.66 billion) to become the Euro zone's biggest deposit bank.The move followed a weekend of frantic talks with authorities in the two countries eager to stem a cash drain on Fortis and Belgian-French bank Dexia, which received a €6.4 billion ($8.68 billion) bailout last week.

BNP Paribas will buy control of Fortis' banking businesses in Belgium and Luxembourg for €9 billion ($12.2 billion) funded through 132.6 million new shares, it said in a statement on Monday.

The French bank, one of the least affected by the crisis in credit derivatives that has brought down rivals on both sides of the Atlantic, will also buy Fortis Insurance Belgium for €5.5 billion ($7.46 billion) in cash, it said in a statement.

The combined bank will have deposits of around €600 billion ($813.82 billion), BNP said in slides on its Web site.

"It's a good deal for BNP Paribas. The price does not seem excessive," Agilis Gestion fund manager Arnaud Scarpaci said.

Shares in BNP Paribas were 3.5 percent lower at €68.86 ($93.40) by 0850 GMT but outperformed a 6.6 percent drop on the DJ Stoxx European bank index. Shares in Fortis were suspended.

BNP stock has fallen around 4 percent since the start of the year, compared to a 32 percent decline in the bank index.

Only a week ago Benelux governments rejected an offer by BNP Paribas as too low. Belgium and Luxembourg returned to the negotiating table with BNP after the Netherlands suddenly decided to fully nationalize the Dutch parts of Fortis.

The Fortis deal is the biggest cross-border rescue since the full force of the credit crisis swept across the Atlantic into Europe last month, upending banks and rattling saver confidence.

Under a share swap announced by Belgian Prime Minister Yves Leterme and BNP Paribas' Chief Executive Baudouin Prot at a late night news conference, BNP will get 75 percent of Fortis Bank Belgium and all the group's Belgian insurance operations.
In exchange Belgium will receive an 11.6 percent stake in BNP through the issue of new shares worth €8.25 billion ($11.2 billion), making it BNP's biggest shareholder.

BNP also agreed to buy two thirds of Fortis Bank Luxembourg in exchange for a smaller 1.1 percent stake for Luxembourg.

"The result of these measures will be that a leading European bank, BNP Paribas, will ensure that Fortis Belgium fulfils the conditions necessary for sustainability and its development," Leterme said in a statement.

BNP said the takeover would boost earnings from the first year, improve its capital ratios and bring €500 million ($678.3 million) of synergies by 2011. BNP's pro forma Tier 1 ratio would improve by some 35 basis points, it said. Restructuring costs would be some €750 million ($1.017 billion).

The acquisition of the banking operations implied a multiple of adjusted tangible book value of 0.7, while the purchase of the life and non-life insurance operations implied a multiple of 1.0 times 2007 life embedded value, BNP added.

The transaction would also see ring-fenced €10.4 billion ($14.11 billion) worth of Fortis' most impaired assets within the structured credit portfolio.

The Belgian and Luxembourg governments will keep blocking minorities of 25 percent and 33 percent respectively in the Fortis banks in their countries.

BNP's Prot said on Sunday that the deal was "a big message of confidence" in Fortis, which had "a formidable business base."

Leterme was forced to hold a second weekend of crisis talks after the Netherlands nationalized Fortis' Dutch operations on Friday for €16.8 billion ($22.8 billion) in a move that caused bitterness between the two Benelux neighbors.

Belgium and Luxembourg took 49 percent stakes in the Fortis banks in their countries last Sunday in a rescue that lasted just five days because depositors and lenders fled.

The Belgian state raised its holding in Fortis Bank Belgium to 99.93 percent on Sunday at a cost of €4.7 billion ($6.38 billion) before selling the 75 percent stake to BNP.

(Editing by David Cowell
Copyright 2008 Reuters).

AIG to Keep Its Commercial Property/Casualty Insurance, Sell Some Other Units

2008-10-07T19:01:00.000+07:00

American International Group Inc. said it plans to keep its commercial property/ casualty and foreign general insurance businesses, while selling off some life insurance business and seeking alternatives for its securities lending business.The company is being forced to sell assets to repay up to $85 billion in loans from the Federal Reserve Bank, from which it has already drawn $61 billion. AIG is paying hefty interest and fees on its loan and must repay the loan within two years.

CEO Edward Liddy said the company would not sell its U.S. commercial lines property/casualty business or its foreign general insurance. Its personal lines business, however, will be put up for sale, except for its private client operations, which it intends to hold onto.

"We are refocusing on our traditional strengths in property and casualty underwriting. We have a number of remarkable businesses with leading market positions and significant competitive advantages that could not be recreated today," Liddy said.

AIG's worldwide property and casualty businesses generated approximately $40 billion in revenues in 2007

AIG said that while it intends to sell life insurance assets, it wants to retain a continuing majority interest in its foreign life insurance operations.

The company is exploring divestiture opportunities for its other businesses and assets. As previously reported, it has reached an agreement to sell its 50 percent stake in London City Airport for an undisclosed amount.

AIG said it is also pursuing a number of alternatives for its financial products business and its securities lending program.

Liddy said the assets sales process must be flexible. "If we get more, we will sell less," he said. But he said he is confident the company will be able to pay back the $85 billion loan from proceeds of the sales.

He said he would prefer that the sales of AIG assets be made sooner rather than later in large transactions with "brand name" companies with strong ratings.

He said there has been plenty of interest among potential buyers.

""We have already been contacted by numerous strong, stable parties, and we expect that buyers will recognize the value of these properties, be a good strategic fit and offer the greatest potential for growth, profitability, and continuing opportunities for employees. Our goal is to emerge from this process as a smaller but more nimble company that is solidly profitable and has good long-term growth prospects," Liddy said.

While the asset sale moves forward, Liddy said AIG is concentrating on hanging onto its current customer base.

AIG's global coordinators for the divestiture program are The Blackstone Group and J.P. Morgan

Credit-Based Insurance Scoring And Measurement Error In The FTC Race Proxy Finding

2008-10-07T18:56:00.000+07:00

Following is the testimony presented by Lawrence S. Powell, PhD before the United States House of Representatives Financial Services Committee Oversight & Investigations Subcommittee on May 21, 2008, by:

Lawrence S. Powell, Ph.D.
Research Fellow - The Independent Institute (http://www.independent.org), and
Whitbeck-Beyer Chair of Insurance & Financial Services
University of Arkansas-Little Rock
***************************************

Chairman Watt, Ranking Member Miller, and Members of the Subcommittee, it was my pleasure to share information with you about insurance scoring during the hearing on May 21, 2008. In response to Representative Waters' request, I offer the following explanation of my disagreement with the FTC finding that insurance scores display a proxy effect for race.

The FTC reports, with reservation, statistically significant race and ethnicity "proxy effects" within the predictive ability of insurance credit scores. I absolutely believe this finding is mathematically incorrect.

The FTC study also includes other findings contrary to insurance scores being proxies for race and ethnicity. They state "the relationship between scores and claims risk remains strong when controls for race, ethnicity, and neighborhood income are included in statistical models of risk." In addition, they find "tests also showed that scores predict insurance risk within racial and ethnic minority groups (e.g., Hispanics with lower scores have higher estimated risk than Hispanics with higher scores). This within-group effect of scores is inconsistent with the theory that scores are solely a proxy for race and ethnicity." Collectively, the lack of objective confidence in the existence of race or ethnicity proxy effects, and the evidence inconsistent with a proxy effect, demonstrate that public policy should not be altered to address this weak finding.

The Race Proxy "Finding"

The FTC report claims to find statistically significant evidence that insurance scores include a "proxy effect" for race. To understand what they find, it is important to understand - at least a little bit - about what the analytical models they use actually test. The "Tweedie GLM" model used in the FTC report is a modified regression model. A regression model measures how much of the variation in a dependent variable (predicted loss) can be explained by variation in an independent variable (race, ethnicity, income, or credit score) while controlling for other independent or control variables (geographic location, age, driving record, etc.).

The authors define a race proxy effect as a change in expected losses due to using insurance scores in the model that cannot be explained by a factor other than race. To test for the effect, they estimate predicted losses for individuals in the sample with and without insurance scores and explicit race and ethnicity controls in the model. Next, they compare predicted losses of each group (African Americans, Hispanics, Asians, and Non-Hispanic Whites) with and without insurance scores. This is reported in Column (a) of Table 7 from the FTC report (copied below). Column (b) shows the same percentage differences when race, ethnicity, and income are explicitly controlled for in the model. The results for African Americans in Column (a) is 10%, and in Column (b) it is 8.9%, a difference of 1.1%. Thus, if all other aspects of the model were reliable, one might conclude that, of the 10% difference in expected losses from using insurance scores 1.1% is attributable to race.

Careful objective review of the FTC analysis leads me to conclude without reservation that flaws in the model render the race and ethnicity proxy findings invalid. The technical term for the flaw in the model is omitted variable bias. It is a form of measurement error in which one variable is not measured accurately and, as a result, its effect is attributed to another variable. Results from the FTC model suggest strongly that territorial risk is not measured adequately, and the incorrect finding of a "proxy effect" is actually attributable to this measurement error.

The territorial risk variable used in the FTC study is not the same as territorial risk controls used by insurance companies. The FTC created a national territorial risk variable, whereas insurers make rates within each state. Calculation of the variable is described in the report as follows:

Territorial Risk Variable
The five firms also submitted to EPIC data on earned car years and claims on property damage liability policies by ZIP code for a three-year period from 2000 to 2002, for their full book of business. EPIC combined the data from the five firms to calculate ZIP-code level average property damage liability pure premiums (i.e., average dollars paid out per year of coverage per car)*. This is an improvement over the original Census-based population density measure that EPIC used in its report. The new ZIP code risk variable was included in the policy database EPIC forwarded to the FTC.
(*For ZIP codes with fewer than 3,000 property damage liability claims, data from surrounding ZIP codes were also used to calculate average pure premiums.)

The zip codes were then ranked by quintile of property damage liability claims. The variables that enter the final model are a series of indicators of the zip code quintile.

Territorial risk is an important predictor of risk because it describes the area where insured automobiles are garaged and driven. However, territorial risk may differ for several reasons. There could be differences in claim frequency due to traffic density, propensity to litigate, moral hazard and fraud, the population that could be injured, or many other reasons. These differences cannot be measured adequately by simply grouping territories into national zip code quintiles.

Further evidence that measurement error in the territorial risk variable is responsible for the race proxy effect is found by comparing results across coverage categories. Because the territorial risk measure is calculated using property damage liability data, it should be most accurate when applied to property damage liability claims. In the Property Damage Liability Coverage column, there is not a statistically significant valid proxy finding. In the other three columns, the magnitude of the estimated proxy effect grows as the expected measurement error from using a territorial risk calculated with PDL claims grows. However, the FTC study reports the sum of the effect on all four types of coverage to arrive at the 1.1% effect for African Americans and the 0.7% effect for Hispanics.

The differences in accuracy of the territorial risk measure across coverage types merit further explanation. As mentioned above, the territory measure is a function of third party property damage liability (PDL) losses by zip code. It is then applied, with noted reservation in the study, to claims for bodily injury liability (BIL), and first party property damage claims referred to in the study as collision (COL) and comprehensive (COM).

PDL claims pay for damage to property owned by a third party that is damaged as a result of the insured driver's negligence. They provide the most accurate estimate of driving ability because they represent almost all potential BIL claims**, and the majority of potential COL claims. They are also not subject to claiming behavior influences such as the impact of deductibles and moral hazard.
(**One exception is an automobile versus pedestrian collision in which the injured party's property is not damaged. However, such claims represent only a small portion of BIL claims.)

BIL claims pay for bodily injury to a third party resulting from the insured driver's negligence. Nearly all BIL losses also involve a PDL loss, but the amount of damage from a BIL loss is much harder to determine objectively because it may include damages for pain and suffering. This lack of objectivity is found to create large differences in claiming behavior across territories (Hoyt, Mustard and Powell, 2006; Cummins and Tennyson, 1996). Therefore, a measure of territorial risk derived from PDL losses will not be accurate when applied to BIL losses.

A similar problem exists for COL claims. COL claims pay for property damage to one's own vehicle when another party is not liable for the loss. A territorial risk measure derived from PDL claims will not accurately reflect COL claim risk for two reasons. First, while PDL and BIL coverage is mandatory for all drivers, COL is not. Because many drivers do not carry COL coverage, the measure will be biased by differences in this coverage across territories. Second, claiming behavior affects these losses because a deductible applies to each occurrence or claim.

Finally, COM claims pay for damage to an insured automobile from perils other than collision with another vehicle or object. Perils covered by COM include fire, earthquake, windstorm, larceny, and malicious mischief. Thus, as the FTC study implies, there is no reason to assume a territorial risk measure derived from PDL claims would apply to COM claims. Nonetheless, the FTC study includes the race proxy finding estimated from COM claims in its conclusion.

The preceding discussion of differences across coverage type leaves little room for doubt that the estimates of a proxy effect, while still questionable, would be most accurate for PDL losses. The FTC report does not find a proxy effect for African Americans or Hispanics when analyzing PDL claims. However, the proxy effect finding presented in the FTC study represents the sum of the effects measured for PDL (proxy effect =0), BIL, COL, and COM, potentially leading readers to an incorrect conclusion. Table 1 shows that as the degree of expected measurement error from the territorial risk variable increases across coverage types, the estimated proxy effect increases, suggesting the effect is actually the result of measurement error in the territorial risk variable.

Collectively, the lack of objective confidence in the existence of race or ethnicity proxy effects, and the evidence inconsistent with a proxy effect, demonstrate that public policy should not be altered to address this weak finding.

References

• Cummins, J. David, and Sharon Tennyson, 1996. "Moral Hazard in Insurance Claiming: Evidence from Automobile Insurance." Journal of Risk and Uncertainty 12 (1996): 29-50.
• Hoyt, Robert E., David B. Mustard, and Lawrence S. Powell, 2006. "The Effectiveness of State Legislation in Mitigating Moral Hazard: Evidence from Automobile Insurance," Journal of Law and Economics, v49 (October 2006): 427-450.

The views expressed in this article/commentary are solely those of the author and do not necessarily represent the views of MyNewMarkets.com, the Insurance Journal or Wells Publishing.

Kingsway Completes Sale of York Insurance to La Capitale General

2008-10-07T18:53:00.000+07:00

Kingsway Financial Services Inc. has closed on the sale of York Fire & Casualty Insurance Co. for C$95 million to La Capitale General Insurance Inc., a member company of the mutual Group, La Capitale, owned by members of Quebec's civil service.Kingsway said it expects to record, in the third quarter financial results, a pre-tax gain of approximately C$44 million, before expenses, subject to completion of a post closing external audit. The gain is somewhat lower than originally anticipated due to the recapitalization requirement under the terms of the purchase agreement, resulting from the valuation of York's investment portfolio and the underwriting results for the third quarter.

Shaun Jackson, Kingsway president and CEO, said the closing will allow his firm to focus resources and capital on its core lines of business and repay its remaining short-term bank debt of approximately U$48 million.

Source:
Kingsway Financial Services Inc.

AIR Estimates China Typhoon Insured Losses at $100 to $250 Million

2008-10-07T18:43:00.000+07:00

Catastrophe risk modeling firm AIR Worldwide estimates that insured losses to onshore properties in China from both wind and precipitation-induced flooding from Typhoon Hagupit will be between $100 million and $250 million.AIR added: "The high winds and flooding caused by Typhoon Hagupit, downgraded to a tropical storm yesterday afternoon local time, affected 8.73 million residents and nearly 990,000 acres of crops in southern Guangdong Province and the Guangxi Zhuang Autonomous Region, according to local officials. The Ministry of Civil Affairs reports that the storm collapsed 27,700 buildings and caused economic losses of nearly two billion US dollars (RMB 13.46 billion). A high proportion of those losses are not expected to have been insured."

Dr. Peter Sousounis, senior research scientist at AIR Worldwide described Hagupit, "as the worst storm to hit China's Guangdong province in more than a decade." However he noted that it had weakened to tropical storm status once it moved inland.

AIR also noted that Hagupit "triggered a reported once-in-a-century storm tide in which water levels rose as much as a meter and more above normal in several coastal cities, including Guangzhou, Foshan, Zhongshan, Zhuhai, Jiangmen and Yangjiang.

Source: AIR Worldwide

New York Insurance Regulator to Oversee AIG Asset Sales

2008-10-07T17:41:00.000+07:00

New York State Insurance Superintendent Eric Dinallo, who heads a national panel of state regulators overseeing possible sales of assets by American International Group (AIG), has asked an investment advisory firm to help out.Centerview Partners will advise the insurance department in connection with its involvement with AIG, and in particular will assist the department, which regulates a number of the AIG insurance units, in assessing the terms of any potential sales of regulated entities, according to Dinallo.

"Because of the efficacy of state-based insurance regulation, AIG's insurance subsidiaries are financially strong and will be a part of the solution as AIG works toward stability," Dinallo said. "It is critical to ensure policyholders' interests are protected during this process. Centerview is superbly equipped to help us achieve this goal."

Any significant transaction affecting an AIG insurance company, including any sale, will need approval from state regulators.The National Association of Insurance Commissioners (NAIC) named Dinallo chair of the 50-state working group established to oversee AIG insurance interests and ensure that policyholders of the insurance subsidiaries remain protected. This oversight will continue as AIG operates under the credit facility offered by the Federal Reserve. Pennsylvania Insurance Commissioner Joel Ario is vice-chair of the working group.

Centerview Partners, based in New York, operates an investment banking advisory practice and a private equity business. The advisory business specializes in independent advice and other client services capitalizing on the experience of its principals. The firm provides senior-level counsel to both domestic and international clients.

Source: NYSID

Treasury secretary calls for insurance law reform

2008-09-24T05:26:00.000+07:00

WASHINGTON—Treasury Secretary Henry Paulson is using the near-bankruptcy of American International Group Inc. as a call for insurance regulatory reform.

Appearing on NBC's "Meet the Press" on Sunday morning, Mr. Paulson said to have allowed AIG the declare bankruptcy would have been "unthinkable," adding that the company was "a few hours" from doing so.

"What the government did was come in in a senior position, senior to the senior debt, well ahead of the shareholders, with…an $85 billion funding facility to allow the government to liquidate this company in a way" that avoided "a real catastrophe in our financial markets," said Mr. Paulson, according to a transcript posted on MSNBC's Web site.

"AIG was so interconnected: it touched money market funds, it touched individual savings," he said. "This is a classic example." He said the insurance operations were regulated by 50 different insurance regulators."Something like this, in my judgment, should never have happened. But again, we did this to protect the taxpayer…and it's something we're going to need to deal with in the future in terms of a regulatory system."

Mr. Paulson noted that he had issued a regulatory reform blueprint in March "because we have a patchwork regulatory system that is outdated." One section of the blueprint called for allowing insurers to choose an optional federal charter rather than continue to be regulated by states.

But Mr. Paulson added that regulatory reform couldn't be dealt with in a week, which is the administration’s timetable for gaining congressional approval of the bailout. "We need this legislation in a week because we have a problem in our capital markets that's urgent to deal with," he said. "And we can deal with it when we get the legislation from Congress."
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Organizations Opposed to U.S. Insurance Tax Bill Issue Statement

2008-09-24T05:16:00.000+07:00

The Coalition for Competitive Insurance Rates, which groups a number of organizations that oppose to the latest attempt to amend U.S. tax laws on foreign insurers, has issued a bulletin outlining the reasons why they oppose recently introduced legislation.They claim that the legislation - HR 6969 - introduced September 18 by US Rep. Richard Neal - will, if enacted, reduce critical US insurance capacity and drive up prices for US consumers." The bulletin said the Bill would "affect all foreign insurers that have US subsidiaries and that also provide insurance and reinsurance coverage to the US."

Nancy McLernon, President and CEO of the Organization for International Investment (OFII), an association of U.S. subsidiaries of companies headquartered abroad, stated: "With the current US financial market turmoil -- including the US government takeover of the country's largest insurer -- this is a dangerous proposal that fundamentally limits capital available to US insurance companies and their consumers, and puts a straightjacket on continued foreign insurer assistance to the US market."This bill would affect workers employed at American operations of non US-based insurance companies - over 100,000 Americans work at these firms, which support an annual payroll of over $9 billion," she added.

"Without a competitive global reinsurance market, it would be even more difficult and expensive for South Carolina and other coastal state home and business owners to obtain insurance to protect them from hurricanes," explained South Carolina Insurance Director Scott Richardson. The bulletin also noted that "Richardson and several other insurance commissioners had written in opposition to similar proposals last fall."

The Coalition pointed out that it had sent a letter to Sen. Max Baucus, Chair of the Senate Finance Committee, last fall, which stated: "Twice before, US policyholder groups have urged opposition to such proposals because of their effect on the availability and affordability of insurance. We say it again now - these proposals are protectionist measures aimed at benefiting some competitors in the market at the expense of others. Ultimately, the US consumers will suffer if this proposal is approved."

The signers of that letter "included major US business and consumer organizations including the Risk and Insurance Management Society, the Florida Consumer Action Network, the National Risk Retention Association, the Organization for International Investment, the CEA -the European Insurance and Reinsurance Federation and the Association of Bermuda Insurers and Reinsurers," said the bulletin.

"This bill is an isolationist effort by a handful of very large, very profitable US insurance corporations who intend to create a new barrier for their competitors so that they will benefit from a protected market. This proposal could not come at a worse time for the US economy. Higher prices for consumers are the likely outcome," noted Bradley L. Kading, President of Association of Bermuda Insurers and Reinsurers (ABIR).

The Association has been in the forefront of efforts by Bermuda-based companies to explain their position to U.S. legislators, who have, as the bulletin notes, periodically tried to close what they contend is a "tax loophole," that allows offshore insurers to pay less tax than their U.S. counterparts (See IJ web site - http://www.insurancejournal.com/news/international/2008/09/15/93680.htm).

Their basic contention is that the "U S. insurance market is dependent on domestic and foreign participants which collectively have enough capital to meet the US insurance market's aggregate capacity needs. US consumers benefit from this global market which assures more affordable and available insurance coverage than otherwise would be the case."

Bermuda companies are heavily involved in reinsurance, professional liability coverage, as well as natural catastrophe coverage for hurricanes and other natural disasters. Kading noted: "Hurricane Ike last week has triggered a $1.5 billion reinsurance payout to the Texas Windstorm Insurance Association, $1 billion of that will be paid by Bermuda reinsurers - instead of by Texas taxpayers. Bermuda and European reinsurers write the overwhelming majority of reinsurance that protects US consumers from hurricanes and earthquakes."

He added: "In the last seven years, Bermuda's insurers and reinsurers have paid more than $25 billion to US consumers from catastrophic loss claims alone. That amount may reach $30 billion by the end of the US hurricane season. The proposed legislation will either discourage these reinsurers from committing capacity to the US market or increase prices for US consumers."

The bulletin concluded that "no tax legislation is needed as US subsidiary corporations are already subject to the US income tax and the IRS already has significant enforcement powers to review affiliated reinsurance transactions."

Source: Association of Bermuda Insurers- www.ABIR.bm and Reinsurers; Organization for International Investment - www.ofii.org

Insurance Producers Start to Move Business from AIG to Competitors

2008-09-24T05:13:00.000+07:00

Despite assurance from state regulators that the insurance subsidiaries of American International Group (AIG) are financially sound, insurance producers are moving accounts from AIG.A survey by Insurance Journal of 1,000 insurance producers including 782 who say they have accounts with AIG found that 343 producers have had clients ask them to move their account out of AIG. That's 43.8 percent of producers with AIG accounts.

Slightly more than a quarter (202 producers or 25.8 percent) of AIG agents and brokers said they have in fact already moved or agreed to move accounts from AIG.

The survey was answered by 782 agents and brokers who said they have business placed with AIG. An additional 218 producers also answered the survey, which asked broader questions related to the AIG financial crisis.More than 62.3 percent said that going forward they expect to place less business with AIG insurance subsidiaries as a result of the parent companies' financial woes.

Not all producers are letting the AIG crisis change their practices. About 35 percent said the financial crisis is not likely to have any effect on their placement decisions.

Industry insiders contend the account movement is understandable even though state regulators are saying that the AIG insurance subsidiaries are in sound financial condition.

"Since the rating agencies apply the same financial rating to the subsidiaries as they assign to the parent, it really doesn't matter where the subsidiaries stand financially - they fall with the parent," said Chris Boggs, associated editor of MyNewMarkets.com. "Also, and not to deride any person or their opinion, some of this has to do with a misunderstanding of the complexity and size of AIG. To some agents, like to some clients, AIG is AIG, and if AIG is in trouble that's all they hear. Anything said in defiance of the agent's or client's opinion is just spin in the view of some."

The pullback reflects agents' desires to protect their clients as well as themselves.

"It's not really a surprise, especially if an agent has been through a few company meltdowns such Reliance, Royal and other such carriers," said MyNewMarket's Boggs. "When the boat springs a leak, it sinks a lot faster than you think or hope. Agents don't want to be accused of not being proactive. Better safe than sorry."

The emailed survey was conducted on Thursday, Sept. 18 and closed at 11 a.m. EDT on Monday Sept. 22, just days after the government loaned AIG $85 billion, seized 80 percent control of the company and installed a new chief executive officer.

Almost 80 percent of all 1,000 survey respondents said they expect AIG will lose market share, with 41.5 percent agreeing this is "very likely" to happen and another 37.5 percent terming it "likely" to happen.

Producers' comments in the Insurance Journal survey indicate that the scrambling for the AIG accounts has already begun.

"We have seen and heard from marketing of other insurers for our AIG business," an agent wrote.

"They are already campaigning for the business," another producer said of the carriers he represents.

"We have received emails and calls from Travelers, Zurich, C N A and Fireman's Fund," reported another.

One agent said one of his agency's personal auto carriers is already offering agencies a bonus for AIG accounts.

If AIG loses business, which of its competitors will gain?

AIG is so big and covers so many markets, the winners could be spread out among major international carriers, large commercial writers, surplus and specialty lines carriers, even regional carriers, according to producers.

Zurich, Travelers, Chubb, The Hartford and Liberty Mutual are among the carriers respondents to the Insurance Journal survey cited most often as potential winners, along with Lloyd's and various surplus lines and specialty companies. The large surplus lines carrier, Lexingon Insurance, is among AIG's companies.

"I think anybody with the ability to compete with AIG will now have an advantage over them," one producer wrote.

"The big names like Travelers or Hartford or even Lloyd's on the odd accounts will be able to use their financial strength to gain an advantage," said one survey respondent.

"I think agents and insureds will look for smaller, regional carriers, thinking this is safer," added another.

According to Boggs, if a client requests to be moved from AIG, the producer can be placed in a tough situation, not wanting to move the customer unnecessarily but also not wanting to risk a lawsuit.

A producer's response could depend on whether that producer is an agent of AIG or a broker on behalf of a client.

"If the producer is a broker, working only for the client with no agency agreement with the carrier, they work only for the client and act in the client's best interest," he said. " If the producer is an agent for AIG, they are contractually required to act in the best interest of AIG since agents work for the carriers with which they are contracted. However, if the client comes to an agent for AIG, and requests that coverage be moved, the agent has little choice but to move coverage or risk losing the client."

But before any decision is made, the producer does have an obligation to spell out the facts of the situation to the client.

"Agents must explain, to the best of their ability and knowledge what the facts of the situation are, in this case that the insurance subsidiaries are very strong and in no financial problem and that it's the non-insurance part of AIG that has caused the problem. Also, that there's a new CEO; the Fed has propped up the company; and all the rest that has happened," said Boggs

The final decision is still the client's.

"After the explanation of the facts, if the client still wants to move, the agent needs to move the coverage or risk an errors and omissions lawsuit if something goes bad," Boggs said.
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Accident Insurance Claim!

2008-09-22T13:02:00.000+07:00

The number of people meeting with accidents these days has increased tremendously. There are many causes of accidents. Injuries can occur either at the workplace, while travelling, holidaying, and so on. Many a times in spite of the best safety measures they take place. If you have been one such victim of an accident, you can make a suitable claim for it.

You can seek claim for various types of injuries. Accidents can result either at the workplace, while holidaying, riding, etc. For any personal injury suffered, you can seek a suitable claim for it by approaching an accident claim help organization. Accident insurance claim is a type of claim which can help you get adequate coverage for the injuries suffered.

Making a claim for an accident may not be an easy task. If you have met with an accident due to the negligence of somebody else, you can get a suitable claim for it. If you are confused as to how to go about the entire process, you can seek help from accident insurance claim specialist. They will help you get adequate claim for it. They will also guide you with the entire process.

Accident insurance claim can provide you adequate coverage against any type of accidents. If you have been a victim of an injury due to an accident, you can seek help from injury claim specialists too. An accident claim company too can help you secure suitable compensation. These companies function with the sole purpose of providing with aid to those who have met with an accident and wish to know how to get compensation.

You can be rest assured of getting the required information on accident claim easily. You are also saved of the burden of running from pillar to post. Make an informed choice now by opting for this. An accident claim company UK too can help you a great deal. You can choose form a range of accident compensation claims. Earlier, there were very few companies which had provisions for the accident compensation. These companies have special provisions for all types of accidents. Make use of it now.

If you have you have been involved in an accident in the last three years for no fault of yours, you can seek help from an accident claim company and take remedial measures.
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Health Insurance - How To Make It More Affordable

2008-09-22T13:00:00.000+07:00

You hear about the problem every day on the news: this country has a problem with its health care system. We are the richest country on the face of the planet, yet we are unable to provide adequate health care to each and every citizen. The rising cost of health insurance is a primary factor contributing to this problem and it doesn't look like that will improve any time soon. There are some things you can do to try and make health insurance more affordable to you and your family though. Let's look at some of these.

If you work for a small company that doesn't offer health insurance or you are self employed, there are private insurance companies from which you can obtain a policy. Many of them don't even require you to have a physical exam. Most will, however, require you to fill out a detailed health questionnaire. If you are healthy and young, with no pre-existing medical conditions, you can get insurance for somewhere around $100 per month. A quick search online will help you find these companies quickly and easily.

Once you do have health insurance, either through your employer or a private insurance carrier, the next thing you should do is carefully consider what your deductible should be. You may not have a choice on this if you are getting insurance through your employer. Still, if you do have a choice, you can save considerable money on premiums if you choose a higher deductible. You must balance this, however, with the amount of coverage you will need. Whatever you choose, don't go for a deductible higher than $1000, as the insurance won't be worth the money you pay for it at that point.

Another factor that will weigh heavily on the price you pay for insurance is the presence of pre-existing conditions. If you or a member of your family does have a pre-existing condition, your premium is likely to be higher and chances are that you will have some kind of waiting period, usually six months to a year, before the insurance company will cover that condition. Every company has a different policy when it comes to pre-existing conditions, so if this applies to you make sure you find out what the companies position is before purchasing coverage.

As always, it pays to compare quotes from several different companies when considering the purchase of health insurance coverage. You will be amazed at how much difference there is between companies for the same exact coverage. If you don't take the time to find out which company is the most affordable, you could be costing yourself hundreds, if not thousands, of dollars per year. You can do this comparison by searching out companies online, or by contacting them over the phone. Just make sure that you are comparing similar policies when you do this. This means that each policy should include the same coverage, including dental and vision insurance, deductibles, and pre-existing condition clauses.

If your employer offers health insurance benefits, chances are that this will be your most affordable option for coverage. Still, it may pay to do some comparison shopping on this, as there is a possibility that you may find more affordable coverage elsewhere. If they only offer coverage for you, and not your family, it may still be more affordable to take that coverage and obtain separate insurance for your family. The same goes for dental insurance coverage.

Whatever you wind up doing to control the costs of health care for you and your family, don't choose to not get health coverage. The fact is, one major medical emergency can wipe you and your family out financially for years to come. Aside from that, you will find that your access to health care will be severely limited without adequate insurance. Carried to the extreme, lack of health insurance can mean the difference between life and death.
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A Guide To Affordable Car Insurance in New Jersey

2008-09-22T12:58:00.000+07:00

There is an Act in New Jersey, called the Automobile Insurance Cost Reduction Act, which allows New Jersey drivers the ability to buy basic car insurance policies in New Jersey, for cheaper than all of the other available car insurance policies in the state. In all honesty, there isn't much that will beat the most inexpensive car insurance policy plan available, however there are some things that you should know about the insurance plan which is being offered before you eliminate all of your other options.

The Automobile Insurance Cost Reduction Act is useful in that it allows all drivers to obtain inexpensive car insurance in New Jersey, because the policy that is offered is significantly cheaper than what you will pay for a standard automobile insurance policy. This basic car insurance policy includes $15,000 per person, for personal injury protection, and $250,000 for significant or permanent injuries. This plan also includes $5,000 of property damage per accident. Unfortunately, liability insurance for bodily injury is not included in this basic insurance policy, however, it is an option that can be added, to the tune of $10,000 per accident for the policyholder.

This basic car insurance policy also does not include uninsured or underinsured motorist coverage, nor does it include collision or comprehensive coverage. Collision and Comprehensive coverage are options which can be added on, but it depends on which form of the basic car insurance policy was issued to the policyholder.

Although this basic car insurance plan is the cheapest available, it offers very minimum coverage. This coverage is enough to get you by if you simply need a cheap insurance plan, but there are much better plans with better and more comprehensive features and even though these plans are more expensive, they are well worth taking a look at when you are considering all of your options.

The basic car insurance is a quick and inexpensive fix for people who are currently driving without insurance, or who cannot get regular automobile insurance coverage because of their credit rating, or their driving record. However, this basic car insurance policy is not for everyone, because the coverage offered is not exactly desirable.

When it comes to choosing the right automobile insurance plan for your situation, it is absolutely imperative that you really shop around. Affordable car insurance in New Jersey can be easy to find, as long as you understand where to look, and how to properly compare quotes in order to ensure that you are receiving the best available policy. There are many different approaches that you can take when it comes to obtaining car insurance quotes, but the method which is generally quickest and the most effortless is simply to do a search online for car insurance companies with offices located in New Jersey.

Most websites dedicated to car insurance will offer you the ability to obtain a free quote simply by inputting some information about yourself, your vehicle and your driving record.

Once this information is sent in, the insurance company will respond with a free automobile insurance quote. There is no limit to how many free car insurance quotes you can collect, so you should make a point to spend a great deal of time researching before you come to any conclusions. You should collect car insurance quotes from every local insurance provider that you can find, then sit down and really weigh your options before coming to any conclusions.

Just because an insurance company offers you an extremely low quote, this does not mean it is the best available insurance for your situation. The basic car insurance policy offered by the Automobile Insurance Cost Reduction Act is proof of this, because even though the insurance quote seems great, the coverage is not really worth the price that you pay for it.

In addition to price, there are some other factors that you should consider when you begin to shop around for insurance providers. There are a large number of different insurance companies and agents available on the internet, each competing to give you the best possible quote for your automobile insurance. Many of these insurance companies have offices in various states, but they may not have a local office in New Jersey. What this means, is that if you ever have questions or concerns pertaining to your insurance policy, you will not have a local insurance provider to turn to in order to address these problems.

This is one of the largest problems associated with doing your automobile insurance shopping on the internet. Before you choose an insurance provider, make sure that there is either a local office that you can visit when you have questions, or that there is a toll free 1-800 that you can call, with a friendly voice on the other end who will walk you through your concerns. Large insurance companies do not always have your best interest in mind, so make sure that you are opting for insurance coverage through a company that will continue to be helpful and easy to work with after you buy your insurance plan.

Something else that you need to keep in mind while shopping for insurance is that there are providers who will offer special discounts and rates if you ask for them. While you are weighing all of your options and considering all of your choices, ask the local agencies that you are considering if they offer any special rates or discounts. In an attempt to be competitive, and to make sure that you choose them as your insurance provider, most insurance companies will discount your rate, or offer you a special deal.

You should also make sure that you are obtaining the right kind of insurance for your situation. For example, there are special insurance plans designated for young or new drivers in order to offer them discounted rates. Additionally, vehicles that are older than fifteen years may qualify for antique car insurance, which entails a discounted rate for cars which are appreciating in value rather than depreciating as a normal vehicle would.
Article Directory

Travel Insurance Questions Answered by Squaremouth, Part Two

2008-09-22T07:08:00.000+07:00

You shouldn’t expect the worst when heading out for a little R&R. But you should know that the right travel insurance can safeguard your vacation investment, and prepare your family for lost baggage, unexpected illness or whatever else comes your way.

Squaremouth, America’s fastest growing travel insurance comparison web site, today announces Part Two of our popular web series on travel insurance’s most pressing concerns. The series provides comprehensive answers to the top questions our customers have asked over the years.

Visit Squaremouth’s Help and Advice section, http://www.squaremouth.com/pages/travel-insurance-advice.php, for answers to these and more questions, as well as an insider’s look at the industry.

You may purchase online or call our licensed insurance experts for detailed assistance. The site displays policies in a format that allows for side-by-side comparison, sorts policies by price, benefit or carrier, and instantly lets you buy your choice of coverage.

What you learn today about travel insurance may surprise you - and it will leave you better protected.

Squaremouth customers’ top Q&As:

How long does it take to get my policy?
Squaremouth provides immediate confirmation of a purchase, both on-screen and by email.

What is the latest date I can buy a policy?
You can typically buy travel insurance up to the day before you leave. However, for policies that include cancellation, it is better to buy as soon as possible after your deposit: the cost is usually the same and you maximize your benefits. If you wait, you run the risk that something will happen before you buy your insurance and you won’t be covered.

What qualifies as a ‘pre-existing medical condition’?
A pre-existing medical condition can be any reason to cancel, interrupt or delay your trip due to a medical condition that existed before you bought insurance. If your heart disease, high blood pressure, asthma or epilepsy is solely controlled though medication, and remains so within what’s called the “look back” period, this won’t be deemed ‘pre-existing’ for insurance purposes. Some plans require you to insure the full pre-paid, non-refundable trip cost to be eligible for pre-existing medical condition cover, refer to the policy certificate for full details of the plan you’ve chosen.

Can I buy insurance after I’ve left on vacation?
If you only need medical and medical evacuation coverage, you can buy ‘international medical insurance’ policies during a trip. Standard travel insurance policies must be purchased prior to departure.

What’s the difference between trip ‘cancellation’ and trip ‘interruption’ benefits?
The ‘cancellation’ benefit covers you if you have to cancel your trip before your departure date. Trip ‘interruption’ covers you if you have to cut short a trip you’re already on.

What’s the difference between ‘primary’ and ‘secondary’ medical coverage?
If there’s a medical claim, ‘primary’ coverage pays you first even if you have other sources of medical coverage (for example, from credit cards or company benefits policies). ‘Secondary’ coverage requires that you claim from those other sources of insurance first; what’s left forms the basis of your ‘secondary’ claim. If you don’t have extra sources of coverage, most secondary medical coverage reverts to primary.

If my trip is insured on my credit card, should I buy more travel insurance?
Check to see exactly what coverage you already have — since what you think you have and what you’re actually covered for are usually very different. In fact, credit cards cover accidents but typically exclude illness — which helps if you break a leg skiing but not if you have a heart attack on the green. Usually, you’re reimbursed only for what was bought with the card. And other sources of insurance - for example employee benefits - may not compensate for lost luggage or aborted trips, or cover family members who might need to be flown home with you. Your private health insurance may provide some coverage if you go abroad, but this may be limited to certain countries and only certain kinds of emergencies.

Why should I buy insurance independently, rather than through a tour operator?
Most experts recommend that you purchase through a third party. A tour operator usually sells policies designed expressly for them. They reap a high commission on those sales, which often leads to higher prices for you and fewer benefits than you’ll find on the open market.

Should I buy a policy directly from my travel agent?
We don’t recommend buying the first policy your travel agent offers: they may only represent one or two insurers. Each travel insurance company aims it’s products at certain types of travelers. Products priced well for 20 year olds may be the most expensive offering for people over 60, which means travel agents that offer a single carrier are only going to be competitive a small percentage of the time. This means you could end up paying more than you need to, for less than the coverage you require. In contrast, Squaremouth and travel agents who use the Squaremouth quote engine, let you search through and compare policies side by side, and instantly buy from a broad range of options.

What’s the difference between AM Best ratings?
AM Best is an independent company that rates insurance companies. Scores of A- or better are awarded to companies in a very strong financial position. Squaremouth sees little difference in the day-to-day operations of a company rated A- versus A+, so we’re comfortable endorsing either. Squaremouth’s zero complaint guarantee overrides the AM Best rating and is discussed below.

About Squaremouth
Squaremouth is America’s fastest growing travel insurance comparison site, helping customers instantly quote, compare and buy policies from every major carrier. Squaremouth has web sites in the US and UK, and an extensive network of partner sites worldwide. The company is headquartered in St Pete Beach, FL. Visit Squaremouth.com or Squaremouth.co.uk.

About Squaremouth’s “Zero Complaint Guarantee”
The cornerstone of our commitment to customers is Squaremouth’s guarantee to remove any company from our web site until a complaint is resolved to our satisfaction. Squaremouth offers the broadest selection of insurance with an emphasis on quality and follow-up care. We also factor in independent evaluation from the insurance industry watchdog AM Best.

Squaremouth offers products from the following travel insurance carriers:
AIG Travel Guard, CSA, Elvia, Global Alert Admin, Global Underwriters, HTH Worldwide, ITravelInsured, Medex, Medjet Assist, MH Ross, Multinational Underwriters (MNU), Seven Corners, Travel Insurance Services, Travel Insured, Travelers Liberty, Travelex, TravelSafe and USA Assist.
www.insurancenewsnet.com

Insurance Technologies and Blue Frog Solutions Form Strategic Partnership

2008-09-22T07:06:00.000+07:00

Colorado Springs, CO and Pompano Beach, FL, September 16, 2008 – Insurance Technologies, provider of point-of-sale illustration software to the insurance and financial services industries, and Blue Frog Solutions, a leading provider of Life & Annuity Order Management and Compliance Solutions for the life insurance and annuities industry, today announced that they have formed a strategic partnership.

The partnership between the two companies will be a multi-phased initiative. In the initial phase, Insurance Technologies will launch a Web services infrastructure as part of its VisibleChoice™ multi-carrier annuity
sales platform, and will leverage Blue Frog’s Blue Source™ platform for uploading, versioning and maintaining standards-based annuity product profile information.

The Blue Source™ infrastructure includes a sophisticated process for the creation and maintenance of accurate product data and supports standardized ACORD Product Profile for Annuity (PPfA) data. Blue Source™ provides an ever-increasing library of specific business rules for a variety of different business uses, version control and full PPfA source control, including development, pilot and production environments.

The next phase of the new Blue Frog–Insurance Technologies partnership will encompass the preintegration of new business information into AFFIRM from VisibleChoice™. The two solution providers are also leveraging standard XML ACORD and Web services for business reasons such as speed to market and cost effectiveness for Broker-Dealers.

Insurance Technologies is committed to providing open and flexible order fulfillment solutions to the Broker-Dealer community through its multi-carrier annuity sales platform, VisibleChoice™. As part of that commitment, Insurance Technologies has selected Blue Frog Solutions as their first automated order management partner.

“We see great synergies between Blue Frog and Insurance Technologies,” says Dan Smith, Blue Frog CEO. “This powerful partnership will ensure that our common insurance distribution and broker-dealer customers will have an optimal solution with the most timely and accurate annuity product profile information.”

Says Steve Horneman, Vice President, Marketing, for Insurance Technologies, “We selected Blue Frog Solutions as our first go-to-market partner in adapting to a model of flexibility in how Financial Advisors place new business orders.”

The partnership enables Insurance Technologies to bring solutions to market that consume standard data, enabled through data services interfaces pre-integrated with Blue Frog’s leading solutions for Broker-Dealers.

“Insurance Technologies acknowledges that flexibility in annuity business order fulfillment is necessary to service the Broker-Dealers and Wirehouses,” says Horneman. “Knowing that some order entry takes place in an automated fashion and other processes continue to be manual, we are proud to acknowledge Blue Frog Solutions as part of our important network of go-to-market partners for fulfilling the promise of interoperability and pre-integration to facilitate straight-through processing.”

About Insurance Technologies (www.insurancetechnologies.com)

Based in Colorado Springs, Colorado, Insurance Technologies LLC offers point-of-sale illustration software to the insurance and financial services industries. Insurance Technologies award-winning product, ForeSight™, supports all product types, including Life, Annuities, Critical Illness, DI, and LTC – all on a single mobile platform. Our latest innovation VisibleChoice™ is a multi-carrier annuity sales platform designed to leverage multiple annuity products and features. Together, they improve point-of-sale effectiveness and help close more sales quickly.

About Blue Frog Solutions: (www.bluefrogsolutions.com)

Blue Frog Solutions, based in Pompano Beach, Florida, is a leading technology solutions provider and business processing outsourcing (BPO) firm that focuses on the life, annuities and long-term care market. Blue Frog automates both front and back end business processes between carriers and distributors with a focus on compliance to create automated business process efficiencies. Blue Frog’s solutions are based on the firm’s flagship ADMServer Framework software suite. As one of the largest providers of ACORDbased transactions and DTCC solutions, Blue Frog currently provides ADMServer solutions to more than 60 percent of the top 40 life and annuity companies and many of the largest distributors in the U.S.
www.insurancenewsnet.com

Anthem Life Reminds Americans to Include Life Insurance in Their Financial Planning

2008-09-22T07:04:00.000+07:00

Anthem Life is encouraging consumers to spend a few minutes in September planning for the unexpected.

"Life insurance isn't for the people who die; it's security for the people who live," said Nicholas Brecker, president of Anthem Life. "It's a subject no one wants to talk about, but you can't avoid it, especially after you've worked hard to provide financial stability for your family."

More than three-quarters of people whose spouses died prematurely (between the ages of 30 and 55) felt they did not have adequate life insurance coverage. That's according to the National Association of Insurance and Financial Advisors. In addition, the LIFE Foundation, a nonprofit organization dedicated to helping consumers make wise decisions about their families' financial futures, found that more than half of Americans say they're worried about how their families would manage financially if they were to die unexpectedly."Every person's financial situation is different, but whether you're married, married with kids or a single parent, it's important to take an inventory and ask yourself if you have enough life insurance should the unexpected occur," said Brecker.

How much is enough? To answer this question, consumers can consult a life insurance needs calculator, such as the one offered by the LIFE Foundation at www.lifehappens.org.

Anthem Life products can help fill the gap with immediate expenses, such as funeral costs; ongoing expenses, such as food, housing and transportation; and future expenses, such as college costs and retirement.

Anthem Life Insurance Company is part of the largest health benefits company in the nation.

Life and Disability products underwritten by Anthem Life Insurance Company. (R) ANTHEM is a registered trademark of Anthem Insurance Companies, Inc.

SOURCE Anthem Life Insurance Company

New Life Insurance Policy Compensates Families, Pension Funds, Care-Providers and Others Suffering Longevity-Related Losses

2008-09-22T07:02:00.000+07:00

Legacy Funding Group, Inc. today unveiled its patent-pending "Deferred-Benefit Life" ("DBL") Policy, which will be offered by well-rated life insurers. Unlike traditional life insurance policies, which primarily compensate beneficiaries suffering financial losses due to the pre-mature death of an insured, DBL policies compensate beneficiaries financially suffering due to the post-mature death of a senior insured that has lived significantly beyond their normal life expectancy.

As we are living longer than ever before, many of us will outlive our retirement funds and other financial resources, incur substantial medical costs, and require extensive long-term care. As a result we may deplete our estate, and significantly strain the assets of our pension fund, family members, care-providers and others. DBL policies are designed to restore and enhance those depleted assets upon the eventual death of the insured, through its payment of a death benefit that increases annually.

Here's how they work:

1) All insureds age 65 and older are eligible for coverage, regardless of their current medical condition;

2) Policy owners pay level monthly, quarterly or annual premiums until the insured reaches age 100 or passes away; 3) To minimize the required premiums, DBL Policies develop no cash or surrender value, and pay no death benefit during the initial "Benefit-Deferral Period" selected by the policy owner (ranging from 3 to 20 years in duration); and

4) Following the Benefit-Deferral Period, the policy's death benefit increases each year per the schedule specified by the policy owner in their DBL application.

Legacy Funding's Managing Director and Chief Actuary, John R. Skar, FSA, CLU, ChFC, noted that, "by providing a death benefit that increases as the insured ages, DBL Policies effectively protect not only investors funding our LegacyLoan(TM) product, but also families, pension funds, care-providers and other benefactors holding a risk of material longevity-related loss. In particular, the product offers an interesting alternative to long term care insurance, as an estate preservation tool."

Legacy's founder, Larry E. Fondren, CLU, ChFC, FLMI also added that, "in many cases, a DBL Policy can provide greater and more cost-effective benefits to seniors, and their family and estate, than a retirement annuity and other less tax-efficient solutions."

For more information, or to speak directly to John Skar or Larry Fondren, please contact Melinda Staab at (973) 400-1341 or melinda@jcpublicrelations.com.
www.insurancenewsnet.com

How Crafty Insurers Deny Care

2008-09-22T06:51:00.000+07:00

Criticism of Britain's government-run health system, known for its rationing, became red hot last month when patients and doctors got wind of government plans to say no to several new lifesaving drugs because of cost. In an op-ed in the Daily Mail,one of Britain's leading oncologists, Jonathan Waxman of Imperial College London, reflected public sentiment as he decried a "misguided and barbaric decision to ban four kidney cancer drugs" that double life expectancy--adding years of life for many patients. You may think this is just happening in Britain. Not so. Only here in the United States, it's the apparatchiks in private insurance companies, managing half of America's medical expenditures for the non-Medicare population in ways often hidden and arbitrary, who hold the broad authority to deny coverage--and therefore, care.

The public is generally unaware of the denials unless the human drama triggers media interest. There's the 17-year-old girl who died before her liver transplant was approved. Or the people in California whose insurers canceled their policies retroactively after they got sick. But these cases are the tip of an opaque iceberg. An estimated 10 to 15 percent of claims are denied for various reasons. Some of them are technical, such as not meeting filing deadlines or failing to get pretreatment authorizations. Denials that produce the most disputes are those where insurers judge the care to be unnecessary or unproven, pitting a proverbial sick David against a multibillion-dollar Goliath. What few Davids know is that insurance contracts grant companies the legal right to manage a patient's care, sight unseen, overruling physician decisions.Iffy and arbitrary. Some denials are reasonable, but many are iffy and seem downright arbitrary, with one insurer saying no to care that others with similar policies reimburse. An FDA-approved drug might be denied because it's used "off-label," even if it's recognized therapy in peer-reviewed medical reports. In cancer care, intravenous chemotherapy drugs given in a doctor's office may be covered, while equivalent, if not better, medicines taken orally are not. When insurance authorization is required for each scan or hospital stay for the same major illness, who's best to say what's medically necessary? Doctors and their staff will spend hours trying to get approvals, but patients should be warned that if the company denies the claim, payment is the patients' responsibility--with bill collectors ready at their door.

The problem is bound to grow as electronic medical records meet sophisticated data tools dubbed "denial engines," touted to reduce reimbursements by 3 to 10 percent. Bearing names like Ingenix Detection Software and Bloodhound Technologies' ClaimsGuard, they search patient records for signs that claims have strayed in any way outside company parameters. Weeding out fraud is one thing; serving up excuses to deny legitimate coverage is another.

More than ever, people must study the details of their health plans. Aetna, for example, offers on its website a list of all services it won't cover--and why. That's good for patients and doctors. Patients should also know that companies must have an internal appeals process. The appeal, however, is laborious and legalistic and lacks transparency. Insurers can drag it out; they can be vague about their decisions. Try asking just what data they used, and also about their decision makers. Who are they? What's their experience? Are they moonlighters, by chance, denying care from New Delhi? (A new trend is to outsource claims adjudication to India.)

But patients with the stamina to endure sometimes win. And even if they lose, completing the internal appeal makes them eligible for an independent external review, which is available in most states. Such review overturns about half of insurers' denial decisions and is final. Nancy Nielsen, president of the America Medical Association and a former chief medical officer of a nonprofit insurance plan, says, "If health insurers are making coverage decisions that are fair and compassionate, very few will be overturned by the state's external appeal process." The numbers speak for themselves--and should be considered by every insurance purchaser.Lack of transparency in the face of such mighty discretionary authority is drawing the attention of state attorneys general. New York's Andrew Cuomo has launched a nationwide investigation into schemes that low-ball reimbursement and stick patients with bills insurance companies should have paid. "All too often," Cuomo says, "insurers play a game of deny, delay, and deceive." His pursuit is in full throttle. And, with his bully pulpit and his power of subpoena, he will be able to pierce an opaque veil that patients can't.
www.insurancenewsnet.com

AIG woes offer double benefit for insurance rivals

2008-09-22T06:43:00.000+07:00

LONDON (Reuters)—Insurance rivals stand to reap the benefits from the woes of American International Group Inc., snapping up assets AIG is forced to sell while gaining greater pricing power as AIG pulls in its claws.

Zurich Financial Services and other insurance rivals are the possible winners say analysts who see AIG emerging from its current troubles with less weight to throw around.

"The first consequence we see is that it should be a positive for the P&C (property and casualty) industry," said JPMorgan analysts in a research note.

"This effectively represents a withdrawal of capacity (or capital) from the marketplace...Pricing in the P&C market is driven by capital—the less capital, the less pressure there is for prices to fall."The likely withdrawal of billions of dollars of AIG capital from the sector will put a brake on the slide in prices in the commercial insurance market, where premiums had been forecast to fall by up to 20% due to intense competition.

AIG has for a long time been a dominant player in corporate insurance, with an 11% share in the U.S. market, as well as for other big-ticket risks such as aviation.

Now, intermediaries predict that although AIG will continue underwriting, it is likely to lose business clients.

"In our view, ZFS is probably the clearest winner," said JPMorgan.

One senior executive at an insurance broker who spoke on condition of anonymity saw others benefiting as well: "Zurich and ACE are likely to be the beneficiaries, maybe even AXA. Anyone with a multinational network will be a winner."
www.businessinsurance.com

Choosing The Right Life Insurance Companies

2008-09-22T06:42:00.000+07:00

To many people they do not purchase life insurance until something happens. To financial advisors, it is part of every ones financial road map. And choosing the right insurance companies amongst the many can be difficult at times. Life insurance companies have their own set of guidelines and policies in underwriting. To have a good financial foundation, you have to include your life insurance in planning your financial road map. There is only one thing in this world that is guaranteed to happen, and that is death.

There is always the need to prepare you financially in the event of an unexpected death. Your family and loves should bear the financial burden should you unexpectedly die. But, have to understand that your situation and needs should be put into consideration. The financial need of a young starting family and a mounting debt is not the same as those people and couples who are near their retirement and have their mortgages paid.

Life insurance companies literally have millions of policies in force from the leading giants of the industry to the smallest insurer. But once you decided to purchase a policy, you have to consider doing your homework and find the right insurer. But finding the right company to get you insured can sometimes be a daunting job. These companies are obliged by law to reserve enough funds to cover future obligations to their clients but make sure to do a research.

The first thing you can do is to check the ratings and financial health of the company you are trying to deal with. Most of the larger life insurance companies are in excellent financial health and are stable. If you want to research and find the companies rating, you can do it online or contacting the rating agencies. The more popularly known rating agencies are Standard and Poors, Moodys and A.M. Best. Be reminded that these rating agencies have their own rating systems. So do not rely solely on one rating but compare from the different rating agencies.

You have to do your homework and compare, analyze and make that what you choose will be the one that suits your needs. Some might be more attractive because of the companies rating, but if it is not that much of a difference, choose the one that fits your needs. Some companies may have a lower rating but the features that they offer match your needs. So choose wisely and take has more benefits to you.

A lot of these insurers have long been in the business and you rest assure that they know and understand the complexities and risks involved. The older and bigger they are, the more you can trust them. But do not get carried away by their stability, because sometimes these insurers have many complaints against them. So always consider checking if they have many complains lodge against them. One way to check this is to go and visit the National Association of Insurance Commissioners site.

When choosing the right life insurance companies to inquire from, make sure they offer the products you are looking for. Then check their ratings, check for any complains and make they have a good customer service reputation. Another thing to make is that the life insurance companies should be able to meet their financial obligations should the need arises. Whatever type of life insurance you will be buying, just make sure your insurer will still be there when you need them.
Article Directory

Types of Insurance Policies

2008-09-22T06:38:00.000+07:00

We have all probably taken out an insurance policy sometime in our lives, what we are going to take a look at, is a small variety of insurance policies you can get and there benefits.

Firstly we will begin with motor insurance, if you are driving a car you have to have insurance in place. Without car insurance you are breaking the law. Other than that having motor insurance in place can provide you with a vast amount of benefits. The two most popular covers would be in the form of third party insurance, which would cover the vehicle that you have collided into, but will not in any circumstances cover your own vehicle. The second will be in the form of fully comprehensive insurance; this will cover damages to a third party and damages to your own vehicle. Although fully comprehensive insurance may cost slightly more, it will be well worth it in the long run.

Next we will take a look at travel insurance, although travel insurance is not essential, it may well turn out to be in a few years. Most package airlines these days are already putting this action into place and will not let you travel unless you have a valid policy in place. Travel insurance can be very cheap to buy and has a wide variety of benefits, such as and most importantly if you fell ill or have injured yourself abroad, your travel insurance would work with the treating doctors to cover all of your fees. Without travel insurance abroad, medical bills can become very costly. Some over benefits that travel insurance can bring is to pay you out a sum when you have been delayed, or if you miss your departure point to reimburse you with your ticket price.

Another well known policy comes in the form of life insurance. Everyone, whether you like it or not is going to die one day. Life insurance is a great way to look after your loved ones, when you are no longer around. The benefits of life insurance can include paying for your funeral costs, which can be quite a pricy task, as well as leaving a fixed sum to your family members. A lot of people do not think about dying, but getting life insurance while you are young and healthy will get you the best rates.

Finally there are various other types of insurance policies available these days; you can obtain insurance for almost anything. Some other popular insurance policies include home insurance, extreme sports insurance, school insurance and personal possessions insurance.
Article Directory

Funeral Held for Insurance Agent, California Bans Train Operators from Texting

2008-09-22T06:37:00.000+07:00

The first memorial service for a victim of the Sept. 12, 2008, Metrolink train collision was held in Simi Valley, Calif.Howard Pompel, 69, an insurance agent and father of three from Moorpark, Calif., was among the 25 people killed on Sept. 12, 2008, when a Metrolink commuter train crashed into a freight train in suburban Chatsworth.

More than 100 friends, family members and colleagues gathered at the Simi Valley Cultural Arts Center to remember Pompel, who was involved in numerous community organizations and events.

His son, Cliff Pompel, said his father was a member of a dozen local groups and always giving of his time.

"Kiwanis, Rotarians, the Elks, the Moose lodge -- you name it, he was part of it," he said.

He also thanked the emergency crews that helped pull the crash victims from the wreckage.

Meanwhile, the California Public Utilities Commission has prohibited the personal use of commercial mobile radio services and devices by on-duty railroad engineers, brakemen, conductors, or rail transit vehicle operators except for personal communications that take place when the train or transit vehicle is stopped and with the approval of the appropriate management personnel.

The CPUC determined that this action was needed due to a June 14, 2008, MUNI accident that may have resulted from the inappropriate personal use of a cell phone while operating the train, as well as the recent Metrolink accident in Chatsworth, which may have been at least partially caused by the inappropriate personal use of a cell phone by the train's engineer.

"Because of the possible danger to passengers, the general public, and the railroad workers themselves, prohibiting the personal use of cellular devices is necessary and reasonable," said CPUC President Michael R. Peevey, who noted that there are no existing federal or state laws, rules, or regulations prohibiting such inappropriate use of cellular devices.

The CPUC's Consumer Protection and Safety Division will prepare a proceeding to determine whether this ban on cellular devices, or other measures, should be adopted on a permanent basis.

The Resolution approved can be viewed at: http://docs.cpuc.ca.gov/PUBLISHED/COMMENT_RESOLUTION/91003.htm. For more information, visit www.cpuc.ca.gov.

Source: CPUC
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

State Regulators: Insurer Groups Must 'Stick to Facts' on AIG

2008-09-22T06:32:00.000+07:00

National Association of Insurance Commissioners (NAIC) President and Kansas Insurance Commissioner Sandy Praeger today issued the following statement regarding American International Group (AIG):In times of crisis, the first questions on everyone's mind are often: Who's to blame? What went wrong? What should be done to fix it? And rightly so. However, to understand the problem that led to the crisis, one must be cautious and examine all the facts without letting politics get in the way.

Yesterday, two major insurer trade associations violated that principle and let their own political agendas get in the way of informing the American public and its leaders on the AIG matter. Both the American Insurance Association (AIA) and the American Council of Life Insurers (ACLI) released statements saying that the recent crisis and the $85 billion line of credit offered by the Federal Reserve to American International Group, Inc., demonstrate the need for a federal insurance regulatory presence.

An examination of the facts will clearly show that these organizations have gotten it wrong and are letting their desire to have an optional federal charter get in the way of making a common sense recommendation to address the problem.

What are the facts?

Although AIG is generally known to the public as the world's largest insurer, in truth, AIG is a financial services conglomerate.

American International Group, Inc., is a financial holding company that owns 71 U.S.-based insurance entities and 176 other financial services companies throughout the world. These include banks, securities firms and non-U.S. insurers, along with other related businesses like premium finance companies.

The 71 state-regulated insurance entities are not the problem. They are all financially sound -- or, in insurance regulatory terms, "solvent" -- and fully able to pay claims presented by policyholders and claimants.

The problem lies with the AIG financial holding company that is subject to federal regulatory oversight by the U.S. Office of Thrift Supervision (OTS). The AIG financial holding company took on more risk than they could handle when investing in collateralized debt instruments, such as credit derivative swaps on mortgage-backed securities. It is important to note that these types of investments are financial products, not state-regulated insurance products. When the U.S. housing markets experienced a downturn, these risky investments lost lots of money for the AIG financial holding company.

Even if there was an optional federal charter for insurers, and some or all of the 71 U.S. based AIG insurance entities had selected to be regulated by the federal insurance regulator, the problem at the AIG parent company level would not have been prevented.

State insurance regulators are proud of the important work they do every day to protect America's insurance consumers -- using conservative accounting and investment rules. It is this conservative approach to investments that keeps insurers from investing inordinate sums in risky investments, such as the mortgage-based securities, which is what caused difficulties for the AIG financial holding company.

Even throughout the AIG financial holding company's liquidity crisis, consumers remained protected by insurance regulatory rules that prevented the parent company from simply raiding capital from its profitable and well-capitalized insurance subsidiaries. A coordinated effort by the nation's insurance regulators ensured that no policyholder assets were used for any part of this transaction.

State insurance regulators have authority over intercompany transactions with the AIG insurers. They are closely monitoring any proposed transactions to ensure they will not threaten the ability of the insurers to pay policyholder claims.

Insurance regulators from every state -- but especially those regulators who oversee a large number of AIG insurance subsidiaries -- have been involved in every step of this process, with the primary focus of safeguarding the assets of the insurers so that they available for the protection of policyholders and claimants.

What is the solution?

Let's start with what is not the solution. There is no reason to believe that an optional federal charter for insurers would have done anything to address this problem. Remember: AIG is a federally regulated financial holding company that took on excessive risk and is suffering the consequences of its poor judgment. Because this financial holding company is not an insurer, it would not have been regulated by a federal insurance regulator, if there were one.

The solution lies in not adding more regulation by either the states or the federal government -- but, rather, in making the markets for these risky securities more transparent so that the buyers of them know about the underlying elements of each bundled security that they are purchasing.

There are ways to create the necessary transparency for these transactions. One way is to create a transaction platform where market participants -- as well as state and federal regulators -- have access to view the disclosures and the transaction details so that the markets become transparent, rather than opaque. Transparent information about the transaction details will keep everyone honest, while allowing all parties to make a reasonable profit from the transactions placed through the platform.

Illuminating the markets is the best way to keep all market participants -- and all market regulators -- informed with the best available information to make the best financial decisions. Remember: The reason for the financial difficulties was the lack of understanding, through lack of transparency, by the AIG financial holding company regarding the financial instruments they had purchased.

State insurance regulators also suggest that federal banking regulators look to state insurance regulation regarding, among other things, restrictions on derivative activities; limits on high concentrations in investment types; and appropriate minimum capital and surplus requirements.

State insurance regulators regularly collaborate with and provide information to our state and federal banking and securities counterparts. We would welcome the opportunity to coordinate efforts to help enhance the stability of our nation's financial markets, minimize disruption to our economy and --above all -- ensure that every Americans' financial future is protected.

Source: NAIC
www.naic.org

A Guide To Cheap Antique and Classic Car Insurance

2008-09-22T05:53:00.000+07:00

When it comes to vehicles, classic cars are absolutely at the top of the pyramid, with their amazing features setting them far apart from the rest of the crowd. Unfortunately, as is typical for anything that attracts attention, classic cars tend to attract a decent share of thieves and vandals. Additionally, because classic cars are rare and tend to be expensive, many large "major player" insurance companies and agents will not even offer insurance for them.

But just because it can be mildly difficult to find the right kind of insurance for your classic car, that does not mean that you can simply drive around without any insurance. Many states require that your vehicle be insured, and you can face serious fines if you are caught driving without adequate insurance coverage.

Finding the right kind of insurance for your classic car is going to take a little bit of time, and a lot of research. Even more research will be involved if you are set out to find the cheapest available antique and classic car insurance available. There are car insurance companies out there which specialize in insurance options for antique and classic cars. Additionally, there are large automobile insurance companies which offer specialized insurance including antique and classic car insurance, but you will have to do a decent bit of searching in order to find them.

A good place to start is with insurance companies like Hagerty, Leland west and Norwich Union which all specialize in antique and classic car insurance. It is important that you weigh a lot of different options, because the costs associated with antique and classic car insurance can vary wildly depending on which automobile insurance provider you go with.

It is also important that you determine what each insurance company will value your classic car at, in order to make sure that you are going to be insured for the full value of your car. Traditional car insurance values the car at the cost to replace it, minus any depreciation that it has experienced. This is what sets antique and classic car insurance apart from traditional car insurance. With antique and classic car insurance, the value of your vehicle is typically an agreement made between you and the insurance provider. This way, you will not lose a serious investment in the event that your vehicle is ever totaled in an accident, or stolen and never recovered.

The absolute best option for you to pursue when it comes to automobile insurance for your classic car is called an agreed value policy. Before this type of policy is purchased, you are required to sit down with an agent with the insurance company in order to come to a concrete agreement for the value of your vehicle. If your vehicle is ever totaled or lost, this is the amount that will be paid by the insurance company. This is also the point where you will receive a quote for the monthly payment. Another thing that sets antique and classic car insurance apart from traditional car insurance is the fact that antique and classic car insurance premiums are typically significantly smaller than what you will pay for traditional car insurance.

However, not just anyone can acquire antique and classic car insurance, so before applying you should make sure you qualify for all of the following criteria:

- Many antique and classic car insurance policies require that you meet a specific age limit. This is to insure that the driver(s) on the policy have adequate driving experience and are not in jeopardy of causing an accident. This makes it difficult for young and new drivers to acquire automobile insurance, even if they are driving an antique or classic vehicle.

- Many antique and classic car insurance policies have also imposed a minimum age limit for your vehicle, in order to determine whether or not it can be considered an antique car. The typical limit is fifteen years old, so if your vehicle is less than fifteen years old you may have difficulty securing antique car insurance for it.

- In order to qualify for classic car insurance, there are certain limits on how your classic car can be used. For example, you must have a garage or some other form of protective storage to park the vehicle in. Additionally, you cannot use your classic car for any business purposes. Finally, there is a limit on the number of miles that you can put on your vehicle every month or year. If you go over the mileage limit you can but your vehicle in danger of losing its protective insurance. Because of the imposed mileage limit, you must also be able to prove that you have another vehicle which is used for normal driving.

Antique and classic car insurance is by far the best option if the vehicle that you are driving can be considered a collectible. This form of insurance is designed to protect cars that appreciate in value over time rather than depreciating. Most insurance companies will allow you to insure your classic car traditionally if you cannot find adequate antique car insurance, but you should expect to pay more in monthly premiums, and to receive significantly less in a pay out settlement if your vehicle is ever totaled.

What this means is that if you are driving an antique or classic car, and specialized insurance is available to you on a local level, you should absolutely take the offer in order to protect your vehicle inexpensively without losing out on the serious investment that went into your prized possession.
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Advantages of Whole Life Insurance

2008-09-22T05:52:00.000+07:00

Buying life insurance can sometimes become a challenge because of the numerous types of getting insured. Most people would look into the types and advantages. There are so many advantages of whole life insurance compared to term life. Whole life is a type of permanent life insurance which is one of the most sought after type of getting insured. It is very important to understand and know the advantages in order to make an informed decision when purchasing plan or policy coverage.

There are many advantages of whole life policy. First and foremost is that it guarantees you a death benefit that will never decrease. Your beneficiaries can have the option of taking the death benefit on a monthly increment payment basis or a lump sum. And best of all is that there will be no federal income taxes charged upon death. So your beneficiaries have some options and you are covered for your entire life. There is also the cash value added feature for this type of insuring.

The cash value added feature is very enticing to some people who are in the market for policy coverage. Unlike other types of insuring, whole life insurance policy accumulates in cash value. You basically have yourself insured and as well as getting some of your premiums put into savings and accumulate in value. This savings can also be tax deferred. And for some reasons you want to surrender the policy, you will receive all the cash value minus any loans and withdrawals.

The other benefit and advantage is the premium level which will stay level or consistent for entire life of the policy. Unlike term life insurance which will change once you renew or reapply and almost always results in increase of premiums. Term as the word suggest is plan coverage for a specified period of time. Plan coverage is anywhere from one to thirty years. You would only choose term life if you are planning for a temporary policy coverage.

Most people would think that whole life coverage is more expensive but if you consider the cash accumulation value that would offset the cost. When purchasing this type, you are getting insured as well as investing. Some of your premiums will go towards the investment portion of the plan. And you cannot take the fact that you will be covered for the whole of your life. One can have the peace of mind that your family and love ones are protected should you pass away.

But even if you have all the advantages known and understood, it all depends on your personal or individual circumstances. If you can afford a whole life then this will be a good investment for you. Otherwise, if you are in the market for one, always check amongst the life insurance companies which are in sound financial state to inquire from. Then get life insurance quotes and compare which will fit your budget and needs. Knowing the advantages of whole life insurance is a good thing, but what suits your needs is what matters in the end.
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Finding Cheap Auto Insurance with a Less than Stellar Record

2008-09-22T05:50:00.000+07:00

Auto insurance is a topic that deserves a lot of attention specifically because of the fact that auto insurance rates can vary a great deal. They vary depending not only on who you are, but what you have done as well. There are certain groups of people that have higher rates as a baseline and then there are people that have been in accidents or obtained parking tickets for infractions that will have higher rates because the insurance company believes that their actions make them a higher risk.

Well, if you are in the second group, there are many different ways that you can find cheap auto insurance. However, you really do need to commit yourself to the search because it is a search that could take you awhile. Having multiple accidents or tickets and trying to get auto insurance is a lot like trying to get a loan with bad credit. Because your past has not been good, the present is not a place in which your word carries a lot of weight. There are steps that you can take to secure cheap auto insurance, some of them being covered below.

Check the Major Companies

The first thing that you want to do is check the major auto insurance companies that operate in your area. For the most part, these will be national or even in some cases multi - national corporations. While it is true that these companies will often have the cheapest insurance deals, at the same time it is also important that you do not purchase a plan from an auto insurance representative right away, no matter how sweet that plan might feel. If your driving record is marred, there are always going to be companies that try to take advantage of you and the only way that you can possibly find the cheapest auto insurance is to make sure that you shop around.

The reason that checking the major companies first is important is because those prices will give you an idea of what the market is offering for your specific situation. Those prices will allow you to make comparisons later on when you find other deals and therefore gauge all of the offers you find against those that are being offered by companies that are supposed to be the top in their field. Checking the major companies is an important first step towards finding cheap auto insurance with a less than stellar record, but it is not the only step and if you give in before trying everything else out, you might be spending more money than you actually have to.

Check the Internet

The internet has spawned booms in many of the different industries and one of those industries is insurance. The internet has allowed for niche marketing, so instead of very generalized multi-national insurance companies, you can instead choose to deal with a very small insurance company that is focused on covering the specific condition or case that you fit into. While you might not find any good deals from these companies, the chance of you finding an excellent deal from one is a very real chance and one that you need to follow through on rigorously.

If you do find a good deal, you need to make sure that you thoroughly research the company to make sure that it is reputable and reliable. If a deal sounds too good to be true, make sure you are extra suspicious of the source. If you combine this type of minute research with the major company quotes that you already have in hand, you should end up with the best package for the lowest price in your particular driving situation.
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Get the best deal for insurance

2008-09-22T05:46:00.000+07:00

The main aim of vehicle insurance also known as (car insurance, auto insurance or motor car insurance) is to protect your vehicle against losses incurred as a result of traffic accidents and liability that could be sustained in an accident.
In many jurisdictions it’s mandatory to have vehicle insurance before using or keeping a vehicle on road. These mainly relate to insurance of both car and the driver however there is variation in the degree of both.

The way to get best discounts on Car insurance-:

Almost everyone would like a reimbursement for the safety of their vehicle, one which is inexpensive, has great scope, and there is not much to worry when it’s the case of an accident.
But many insurance companies only boast of full insurance coverage at low prices but in reality only a minimum amount of discount rate is provided.
The only and the best way is to do a market research in relation to various car insurance. One thing to remember when you shop for car insurance is to first determine what and how much coverage you require. This helps you to determine which companies offer the best discounted rates for car insurance.
The following are the types of coverage-:
Property Damage
Personal Injury Protection
Uninsured Motorist Protection
Bodily Injury Liability

The various insurance companies can be called and the discount rates can be found out. This information can be gained by conversing to an agent, but internet can be a quicker and cheaper mode of gaining knowledge regarding auto insurance.
Their can be endless options to get cheap car insurance and to reduce their premiums. Some of them are-:
You can choose amongst Fire or Comprehensive, Theft, Third Party etc. but here the main things to take into concern are your age and the condition of the car.
You can take the option of paying higher excess in the event of an insurance claim.
One of the ways is to use an insurance broker if you don’t have time for calls and internet.
You can start building ‘no- claims’ bonus as soon as possible.
Try not modifying or customizing your car.
You can recheck your mileage as it is best way to cheap car insurance.
The above mentioned points can help you get cheap car/auto insurance.
Internet has a glut of sites can that give you information about car insurance quotes. You need to take some considerations while searching for quotes online. Auto insurance often varies by driver history, state, model of automobile etc. there are many sites which enable you to get the quotes online without wasting much time and only some formalities to fulfill. These online websites provide car insurance quotes in seconds which don not sacrifice coverage for convenience. They also provide specific coverage required by in the area you live, therefore, no headache of visiting car insurance companies located in far-off places. Another way of getting auto insurance is to ask your colleagues who might have got there vehicle insured. They can recommend their insurance agents and you can make an appointment for queries and avail the car insurance if you feel satisfied.
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Tips for Shopping for Franchise Business Insurance

2008-09-22T05:45:00.000+07:00

When opening a franchise business there are a million and one things that you will need to do before opening those front doors for business. The money or funds will need to be in place to buy into the franchise, the property will need to be purchased or leased in order to house your franchise and you will need to secure insurance for the franchise.

While many people think about and plan for the first two parts of the franchise choice, the insurance for the franchise is often the least planned yet the most important. Insurance is there to cover the business in case of loss due to theft, fire or some unplanned act of God. Your coverage, limits and out of pocket expenses will all need to be taken into consideration when choosing the proper insurance for your franchise.

The Quote

With the advent and popularity of the Internet, receiving a quote for insurance coverage is a simple, quick process. Just because the first quote you receive seems like a great price, do not stop at one quote. Comparing quotes can mean comparing coverages, limits and out of pocket expenses from a variety of companies. What may seem like a great deal may leave you hanging in a time of need, so compare with more than on insurance quote.

The Multi-Coverage Deal

Some insurance for franchise companies will offer package deals for the business owner. These packages may include price reductions when more than one coverage is held with the company. This can include lease or rental insurance, vehicle insurance and life insurance. This is especially important for those business owners who are just starting out in the world of business and need to save as much money as possible until the business becomes profitable.

Always Tell the Truth

It is important to always reveal everything to the insurance agent. Just because a certain coverage may cost a little more in your area of business or your area of the world, does not mean the insurance plan should be entered into based upon lies. If the insurance for franchise company finds out you have lied and you need to make a claim, they can deny the claim and you will be left without any coverage and often shutting the doors.

The insurance for your franchise is there to keep you and your business safe. When you are putting $10,000, $20,000 or $100,000 into the startup costs for a new business franchise, you will want the best coverage for that business.
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Are You Breaking The Terms Of Your Car Insurance?

2008-09-22T05:43:00.000+07:00

There are millions of drivers on the roads all driving around thinking they are fully protected by their car insurance policy. The harsh reality though is that there are a lot of people on the roads who are breaking the terms of their insurance policy without actually knowing it.

This means that if they were ever to have a road accident and needed to make a claim, they may find that the insurance company will refuse to pay out the full amount because they failed to abide by the terms of their policy. This does sound like an unlikely scenario but it does happen a lot and can be very costly for drivers because they have to pay for the remainder of the damages out of their own pocket.

So how can you avoid invalidating your car insurance?

Well the most important point is to always ensure that your driver details are completely up to date. Insurance companies have to know all your driving-related details so they can build up a risk profile of you and therefore compile a quote. So this means you need to keep your insurance provider fully informed of any motoring convictions or speeding offences that you may incur.

You also need to let them know about any changes in your driving habits. So if you change your job, for instance, and as a result you find yourself driving significantly more miles every year, then you need to let them know about this, as this obviously increases the chances of you having an accident, which will need to be reflected in your quote.

Similarly another issue that may invalidate your car insurance relates to learner drivers. A lot of parents end up teaching their sons or daughters how to drive in their own car, so before taking to the road, even if it's a private road, you should always check the details of your insurance cover to make sure you will be fully compensated in the case of an accident.

There are other factors to consider, but these are some of the main points I want to discuss. The important message is that if you are going to pay for car insurance every year, which is a legal requirement in most countries, you at least want to know that you will receive full compensation if you do ever have an accident. So always read the terms of the car insurance policy and fully ensure that are not accidentally breaching these terms or invalidating your car insurance in any way.
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Life Insurance Quotes And The Average Cost

2008-09-22T05:42:00.000+07:00

People who are looking to purchase life insurance should get life insurance quotes online to determine the average cost or price. Some people have the concern of how much does life insurance cost. And the best way to deal with this is to get an online quote and compare it with the different life insurance companies. With the recent developments regarding the insurance industry, it is a must to know the financial soundness and stability of the company. A highly rank company would be a choice to inquire from.

The largest company in the industry can also go down the tubes thus it is more important to know high they rank and their financial status. You would like that these life insurance companies would be there when you are no longer there. Simply put, these companies should be around to pay the death benefits when your beneficiaries need them.

But the main concern that most people have is the average cost or price of getting insured. When one is in the market for policy coverage, you would like to know the average cost or price to determine what your range is going to be. Knowing the average cost will give you the tools needed to make a sound decision on what type of insurance you are going to purchase. The thing you can use in this strategy is to get life insurance quotes and compare it amongst the many insurers you inquired from.

Life insurance quotes can easily be access online. An online quote will give you a lot of choices. You can make calculations according to your age, gender, health, occupation and height and weight ratios. You can calculate it making different scenarios in order to have many different possible options when negotiating with your insurer. Not all insurers have the same price or cost even for the same type of insuring. These insurers have their own policies and guidelines in underwriting so their premiums will never be the same.

Because of the accessibility and ease in finding and getting quotes online, this the preferable way of understanding the average cost of insuring. Knowing what is the average cost of life insurance is a concern which can be easily known through life insurance quotes. There are so many ways of using these quotes online. This includes the imputing different number of years if you are planning a term life. It will calculate for you the possible premiums that you will be paying for any hypothetical specified period of time. And to access this quote calculators are almost always free and with no obligation.

If you are one of those who are concerned about the how much does life insurance cost, you need not worry about it. With so many websites that offer these services for free, there is no reason for you to be concerned. Life insurance quotes can give you the average cost or price that you will give the needed projections of your possible monthly premiums. Compare the results you got from the life insurance quotes and make that right decision when buying policy coverage. But the bottom line is purchase the one that suits your needs and budget.
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Term Life Insurance and How Much Does It Cost

2008-09-22T05:38:00.000+07:00

Too many people are concerned about how much does life insurance cost or what is the average price insuring yourself. But you cannot blame them because they a vested interest in their investment and money they use to pay the premiums. The cost or price of your policy coverage is not the only thing you have to be concerned about. The type of life insurance is another important aspect of looking for plan coverage. And term life insurance is the cheapest and most commonly sought after type of insuring.

For new families and just starting out, children are very expensive and this is common knowledge to any prospective parent. This expense will never go away until your children are able to feed and provide for themselves. And if something happens to you or your spouse, your child care cost will in fact actually rise. This is because of the added trouble of dealing with and trying to do two different tasks that two parents should be doing. You will definitely have very little time to do other things and you will end up paying for child care expense.

Every parent who lost a spouse especially a bread winner has the income or budget compromise. Thus, sometimes the remaining parent will have to find a second job to compensate for the loss. And this is extremely difficult especially when your children are still very young. Now, you will spend more time out of the house and not with your children because of your second job. It is most likely that the financial burden can spiral and leading to financial and emotional trouble. The emotional trouble alone can really make somebody sick and unable function much more work. The trauma of losing someone very dear to you can really take its ugly head.

With these entire sad and troubling situations one has to go through in cases like this, a term life insurance could at least lessen the burden. Every new family who are just starting out should protect and secure their family and love ones with a term life insurance. It should be a standard purchase for every new family. This security and protection if insured is priceless when tragedy strikes many families. Obviously it will not completely eradicate the problem of losing someone very dear to you; it would be more painful if your way of life is abruptly stop or change for the worse.

Term life insurance is the cheapest amongst the many types of insuring yourself. Compared to whole life insurance, term life is sometimes ten times cheaper. But the two types offer different features and components. Term life covers you for a specified period of time while whole life has a savings feature attached to it. But with term life, you can purchase 1, 5, 10, 15, 20, or 30 year policy. What you can do is choose what suits your needs and you can change it later when your predicament changes.
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Insurance Claims And Common Characteristics Of Risk Covered

2008-09-22T05:37:00.000+07:00

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium.

An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

Commercially insurable risks typically share four
common characteristics

Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.

Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.

Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.

Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
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What is a Minibus, Do I Have the Correct Licence and What About Insurance?

2008-09-22T05:29:00.000+07:00

More drivers in the UK today are using MPV's and People Carriers. But as the car has 7-8 seats can it be classed as a minibus? The answer is 'no'.

What is a Minibus?

If it has between 9 to 16 passenger seats then its classification is as a minibus. This has implications for the type of driving licence required and may need specialist minibus insurance.

Do I Have the Correct Licence?

All licences issued after 1 January 1997 need a category D1 classification to allow the driver to use a minibus. The licence can be obtained by passing a Passenger Carrying Vehicle (PCV) test provided by the DVLA.

A minibus can be driven on a full category B (car) licence, but the following conditions must to be met:

1. The minibus can only be used in the UK. A D1 licence is required for driving in Europe.

2. The minibus is only used for social reasons. It cannot be hired and there must be no financial reward.

3. Trailers cannot be towed.

4. The driver must to be over 21 and have held a Category B license for more than 2 years. Drivers over the age of 70 will need to prove their medical fitness to drive.

5. The minibus must not weigh more than 3.5 tonnes. If it is carrying special equipment for disabled passengers the maximum weight is 4.25 tonnes.

6. Payment cannot be accepted for driving the minibus.

What About Insurance?

Insurance for a minibus, as with any motor vehicle, is required by the law. The minimum level is Third Party cover but this is a very basic policy and you are risking a large bill if something were to happen that required a claim.

The other two types of insurance are Fire and Theft, and Comprehensive. Specific 'extras' can be added to the insurance depending on the minibus's use.

Whatever type of cover you chose it is better to be 'safe than sorry', especially if there is the extra responsibility of transporting passengers. If the minibus is used by many different drivers then leave a copy of the policy in the vehicle in case it is required after an accident.

Consult a specialist minibus insurance provider. They will be able to advise you about what is needed and find a suitable policy tailored to your specific requirements.

The Directgov website has more information about the UK regulations for driving a minibus and there is a helpful section explaining the difference between the driving licence categories.
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Head of AIG's Singapore life insurance unit resigns

2008-09-22T05:27:00.000+07:00

SINGAPORE (Reuters)—The Singapore head of AIA, the life insurance unit of American International Group, quit on Thursday, the city-state's central bank said.The resignation came after widespread customers' fears over AIG's financial health led hundreds of policy-holders throng AIA's office to redeem their policies this week.

The Monetary Authority of Singapore said in a statement late Thursday it was notified that AIA Singapore's executive vice-president and general manager Mark O'Dell resigned with immediate effect, and that there were no other changes to its management.

"We are satisfied with the ability of the company to carry on business as usual and to meet new demands even when there are any changes in management," said Low Kwok Mun, MAS' Executive Director for Insurance Supervision.The central bank has tried to calm fears of policy-holders this week.Singapore's Straits Times newspaper, without naming sources, said O'Dell is joining rival Canadian insurer Manulife Financial to be general manager of its Taiwan operations.

AIG said O'Dell's decision to leave not related to the recent events.

Copyright 2008 Reuters

Insurance Glossary of Terms

2008-09-22T04:47:00.000+07:00

Assured - Those insured under the terms of an insurance policy.

Benefit - The money paid to the policyholder when a claim is made.

Bid Price - The selling price or cash-in value of your unit holdings.

Bonus - Relates to a with-profits policy. The amount of money added to the benefit payable under the policy. The amount is dependent upon the profits made by the insurance company. Added bonuses cannot be taken away.

Convertible Term Assurance - A term insurance policy which gives you the option to convert your current policy to a whole-life or endowment insurance policy, without having to take further medical examinations.

Critical Illness Insurance - A policy that pays out a lump sum on the diagnosis of life threatening illnesses indicated in the terms of the plan.

Decreasing Term - A form of term life insurance where the death benefit decreases each year as per your policy. Premiums remain level. This type of certificate is frequently sold as mortgage insurance. There is no surrender value for this policy.

Endowment Insurance - An insurance policy that pays a stated amount at the end of a specified period or upon the death of the insured if it occurs within that period.

Family Income Benefit - Term assurance which pays money to the life assured's dependants for a set period, rather than paying a lump sum.

Guaranteed Bond - A bond in which principal and interest are guaranteed by an entity other than the issuer. Guaranteed Bonds can be income or growth.

Increasing Term - The cover and the amount you pay into the policy are increased by a specific percentage each year calculated on the original sum insured. Designed as a way to increase your life cover as your earnings increase.

Investment Bond - Combines investment with some life cover. The payments you make into an insurance policy or investment bond, usually a lump sum, are invested in the insurance company's with-profits or unit-linked funds (Life Funds). Different types of bonds include the guaranteed bond and unit-linked single premium bond. Not to be confused with a company or government bond, an investment that offers a fixed rate of interest and an area where your chosen Life Funds may be invested.

Life Fund - This usually refers to Unit linked Investment Funds. These are funds run by Life Assurance or Pension Companies. Such funds are used for individuals holding life assurance policies to invest in. The assets held within the fund are divided into a number of units. When an investor contributes to a Life Fund, units are allocated to investors in proportion to their investment.

Maturity - An agreed date when an endowment policy ends and the proceeds, including any bonuses, are payable.

Mutual - A life insurance company that is owned by its with-profits policyholders.

Offer Price - The price at which fund units are bought.

Premium - The amount of money paid into an insurance policy.

Proprietary - A life insurance company that issues its profits to its shareholders.

Qualifying Policy - A life assurance based savings plan that has to be written for a minimum of 10 years and must fulfil certain qualifying policy criteria to ensure the final payout is tax free.

Renewable Term - Term Insurance that may be renewed for another term without evidence of insurability.

Single Premium Policy - Where a single lump sum is paid for an insurance policy.

Sum Insured - The amount of money that is guaranteed to be paid under an insurance policy, before any bonuses are added.

Surrender Value - Not applicable to all life insurance policies. The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage

Term Insurance - Provides policyholder with protection only. Life insurance payable to a beneficiary only when an insured dies within a specified number of years (the term). If you live beyond the term you do not receive any payment. This is thought to be the cheapest type of insurance.

Terminal Bonus - This is an extra bonus determined when a death or maturity claim is paid. Terminal bonus is often only paid if the policy has been in-force for a minimum number of years at claim time. The amount is dependent upon the profits made by the insurance company.

Unitised With Profits Fund - Also known as a Unit-Linked With Profits Fund. A type of Life Fund that can invest in UK and overseas shares, property, fixed interest securities and cash. When you invest in this fund through an insurance policy, you buy 'units'. When an annual bonus is declared, you can either receive more units or it is added to the unit price on a daily basis. Due to the addition of bonuses the unit price does not reflect the value of the underlying investments.

Unit-Linked - Also called Unitised. If your insurance policy is unit-linked, some of your money is used to purchase 'units' in a fund. The value of your policy at maturity is dependent upon the growth of the fund in which the policy is invested. Generally refers to policies that offer protection and saving such as endowment insurance, whole life insurance and investment bonds.

Unit-Linked Single Premium Bond - A single lump sum life insurance policy where your investment is spread over a number of Life Funds.

Whole Life Insurance - Whole life insurance provides a death benefit for the policyholder as it builds up cash value. The policy remains in force for the lifetime of the insured, as long as premiums are paid according to the policy agreement. You can choose insurance that pays out on death a guaranteed sum only, the sum plus any bonuses that have been added, or the sum plus any additional value from the growth of the funds invested in.

Without Profits - When a policy reaches maturity or the policyholder dies, the amount paid out is the basic guaranteed sum only. You would not be entitled to any bonuses.

With Profits - Relates to insurance policies that combine investment with protection. This type of policy is entitled to a share of the profits made by the insurance company. Premiums are invested in the with profit fund, reversionary bonuses are applied usually on an annual basis which reflect the investment growth of the fund assets. On death and/or maturity a further terminal bonus might be applied to the fund value.

With Profits Bond - An insurance policy where your lump sum is in most cases invested in a Unitised With Profits Fund (which is listed under the Life Funds section).
Article Directory

World insurance in 2007: emerging markets leading the way

2008-09-20T05:53:00.013+07:00

According to Swiss Re’s sigma study "World insurance in 2007", World insurance premium income grew 3.3% in real terms in 2007, reaching USD 4 061bn. This growth was primarily driven by the life business in industrialised and emerging markets and to a lesser extent by the non-life business in the emerging markets.

Life insurance premiums increased 5.4%, which is above the previous ten year average. Non-life premium growth was robust in the emerging markets (+10%), but decreased in the industrialised countries (-0.3%). However, both the life and non-life industries are financially sound despite the challenging economic environment.

Life insurance: pension and annuity products drive growth

According to Daniel Staib, one of the study’s authors, “Despite a macroeconomic environment characterised by marginally slower economic growth and rising inflation, life insurance continued to expand in 2007 with world life insurance premiums increasing by 5.4% to USD 2 393 billion.” Sales of retirement and other wealth accumulation products spurred growth in the industrialised economies. Life insurance in the emerging markets was fuelled by strong economic performance and catch-up potential.

Key drivers of growth in the life business:

the trend towards single premium business and pension and annuities products continued to drive sales in countries where an aging population and reductions in state social security benefits were causing a shift from a traditional life insurance model to a pension-driven one;

the growing economies of the emerging markets with a relatively young population and an expanding middle class are driving sales across all products;

in 2007, the severe credit crisis and turbulent financial markets did not significantly affect life insurance sales.Non-life insurance: profitable despite slow growth

Global non-life premium growth slowed to 0.7% in real terms, totalling USD 1 668bn in 2007. Non-life premium growth continued to follow divergent trends in the industrialised and the emerging markets. While premium volume retreated in the industrialised markets, growth slowed marginally in the emerging markets. Though downward pressure on premium rates continued in some countries, overall technical results were favourable and profitability remained sound.

Outlook: healthy growth in life, a stagnant non-life sector

Growth in life insurance premiums in 2008 is expected to moderate as capital and stock market turmoil dampen demand. Daniel Staib notes, “As the economic environment and capital markets stabilise, life insurance is projected to resume its strong performance in the medium term, both in terms of growth and profitability.” In regard to the non-life business, he adds, “Non-life insurance premiums are expected to fall in the industrialised economies. However, non-life premiums will continue to grow in the emerging economies, albeit at a slightly slower rate than in the recent past. ” The effects of the sub-prime crisis are expected to be limited, resulting in lower investment results. A further concern is rising global inflation, which will increase claims costs in liability insurance and other long-tail business lines as well as hamper profitability.

Note: Swiss Re’s sigma study "World insurance in 2007" examines the insurance markets of 147 countries, making explicit reference to 88

Swiss Re’s sigma study "World insurance in 2006"

Bancassurance

2008-09-20T05:53:00.012+07:00

Bancassurance symbolises the convergence of banking and insurance. The term has its origins in France and involves distribution of insurance products through a bank's branch network. While bancassurance has developed into a tremendous success story in Europe, it is a relatively new concept in Australia and Asia.

Most new insurers have entered into memoranda of understanding with banks to use their branches as outlets for marketing standard products. State Bank of India, Vysya Bank and J&K Bank already have joint ventures in life insurance. Vijaya Bank and Punjab National Bank are in the midst of finalising life and non-life ventures.

The Insurance Act allows only those companies registered under the Companies Act to become corporate agents. This gives the new generation and old private sector banks a head start over Public sector banks , which are technically not eligible to sell risk products.

IRDA, IBA & RBI are in discussions to iron out the various issues, as public sector banks will play a key role in the distribution of products.
Bancassurance: emerging trends, opportunities and challenges ... click here

Bank.net India

New AIG CEO Liddy: Insurer's 'Mess is Solvable'

2008-09-20T05:53:00.011+07:00

American International Group Inc., which narrowly escaped financial collapse this week, on Thursday said it had named Edward Liddy as chairman and chief executive.Liddy succeeds Robert Willumstad, who is leaving after three months on the job, and in the wake of AIG -- once the world's largest insurer -- agreeing to an $85 billion rescue plan from the U.S. Federal Reserve.

"My intention is not to liquidate the company," said Liddy, speaking with employees on Thursday, according to a source who heard the comments.

Liddy also said AIG's insurance operations were well funded, and that the company's "mess is solvable."

AIG, at the end of 2007, had 116,000 employees in operations throughout 130 countries and territories.

As part of the federal bailout, AIG will have to repay monies borrowed from the government by selling assets or units.

Liddy said AIG had to move quickly to decide what should be sold, or risk being hurt further.

Liddy was formerly chief executive of large U.S. home and auto insurer Allstate Corp.

(Reporting by Lilla Zuill; Editing by Phil Berlowitz, Bernard Orr)
Copyright 2008 Reuters.

Kentucky Checking Insurer Response to Storm Damage

2008-09-20T05:53:00.010+07:00

The Kentucky Department of Insurance continues to assess insurance company response to the devastating Sept. 14 windstorms. The storms caused widespread damage, according to reports that insurers submitted to DOI, but company representatives were on the ground quickly to begin the claims process.

"There was a delay in the beginning because many areas were blocked by downed power lines and trees. Company representatives are not first responders so they are careful to stay out of the way until that important work has been completed," said DOI Commissioner Sharon P. Clark. "However, we are hearing from many companies, some daily, and are pleased so far with the responsiveness."

Clark said most of the inquiries received by DOI's Consumer Protection and Education Division have been related to tree damage or food spoilage.

"We urge consumers to be patient as they work through the claims process. Many adjusters were working in Gulf Coast states impacted by Hurricane Ike and are being pulled back to Kentucky. With the widespread damage we've seen, it will take some time to respond to all customers," she said.

DOI offers these basic tips:
- Most policies cover tree removal if the tree falls on a covered structure. If your neighbor's tree falls on your property and damages a covered structure or vehicle, your insurance policy covers your loss.
- Read your policy carefully. Many policies do not offer coverage for food spoilage if the electrical outage took place off premises.
- When the adjuster arrives, ask for identification. Get the adjuster's name, a local phone number and the company he/she represents. Ask questions and take detailed notes.
- Broken glass or other damage to your car is covered if you have comprehensive coverage. You are not covered if you only have liability insurance.
- When having repairs completed, deal only with reputable, licensed and insured local contractors you know or can check out. Don't deal with "fly-by-night" remodelers who go door-to-door, especially those offering greatly reduced prices.
- Contact DOI at (800) 595-6053 and ask for a copy of "After the Storm Has Passed." This publication includes valuable information, a complaint form and information on how to prepare for the next disaster. The publication is available online at http://doi.ppr.ky.gov/kentucky/Documents/pubs/AfterTheStorm060408.pdf

Source: Kentucky Department of Insurance

Restaurants' Workers' Comp Insurance Decisions Based Heavily on Price

2008-09-20T05:53:00.009+07:00

A recent national survey of restaurant decision-makers finds that they place too much emphasis on the price of their workers' compensation insurance, potentially forgoing the long-term financial benefits of accident prevention and other loss control measures.The survey results, released by Reno, Nev.-based Employers Holdings Inc., found that most workers' compensation insurance decisions are made by restaurant owners themselves (96 percent of the time). The survey also found that price is the key criterion that drives the workers' compensation decision for 71 percent of restaurant owners and managers -- and that restaurants are more likely than other small businesses to switch carriers based on price.

While nearly half of all restaurant survey respondents reported having had at least one costly workers' compensation claim in the past five years, 61 percent of survey takers who switched carriers at their last renewal switched because of price -- and no restaurant owners participating in the survey reported switching carriers to obtain more effective loss control and safety program support.

"Price can logically serve as a deciding factor in many restaurant purchases, but when it comes to workers' compensation insurance, a carrier's claims management, financial strength, safety and loss control expertise can bring added value," noted Martin Welch, president and chief operating officer of Employers Compensation Insurance Co. and Employers Insurance Company of Nevada, insurance subsidiaries of Employers Holdings Inc.

Both the price sensitivity and busy schedules of restaurant owners are recognized by trade groups and industry associations which frequently ally with insurance carriers to offer association members group incentives, industry-specific expertise, and loss control programs. Restaurant decision-makers in the survey weighed their trade group's recommendation as extremely important (rated 9 or 10 on a 1-10 scale) when they purchase workers' compensation insurance. Yet despite the importance placed on restaurant association recommendations and potential savings through group incentives, only about 1 in 10 survey-takers reported buying workers' compensation insurance through an association, the survey indicated.

Employers released survey results on the restaurant industry, obtained through its semi-annual Small Business Market Monitoring Program conducted in collaboration with Profile Marketing Research, Inc., of Lake Worth, Fla. Restaurant industry-specific data was collected through telephone interviews with a representative industry sampling of 107 respondents representing eating places with 5-99 employees. Overall survey results have a +/- 9.47 percent margin of error.

Source: Employers

Hawaii Pacific University Launches Insurance and Risk Management Program

2008-09-20T05:53:00.008+07:00

Hawaii Pacific University has instituted a graduate program in insurance and risk management.According to Hawaii Insurance Commissioner J.P. Schmidt, "HPU's graduate insurance program is the first in the West. Many corporations, as well as insurance companies, have an increasing appreciation for the need to understand all the risks their companies' face and the alternative means of mitigating that risk."

The Hawaii Pacific graduate program will offer classes leading to a graduate certificate, or if students take the core Masters of Business Administration classes, they will receive an MBA with a specialization in insurance and risk management. Dr. Warren Wee helped to design the program.

"[This new program] is a useful service to the local business and insurance community, who have stated that it is difficult to find people with this important knowledge. And, it provides good opportunities to local students and employees to get a leg up in a growing industry," Wee said.

"The Certificate program is an outstanding opportunity for those who wish to advance up the corporate ladder. It provides specialized knowledge that is critical to modern corporate management," added Commissioner Schmidt.

For more information on the program, contact Dr. Warren Wee at wwee@hpu.edu or (808) 544-9325.

Source: DCCA

Zurich Completes Banco Sabadell Insurance Partnership Deal

2008-09-20T05:53:00.007+07:00

Zurich Financial Services Group announced the completion of the acquisition of a 50 percent stake in the insurance operations of Spain's Banco Sabadell S.A. and the establishment of a long-term strategic distribution partnership with the country's fourth largest bank.Zurich acquired a 50 percent participation in BanSabadell Vida S.A. de Seguros y Reaseguros (BanSabadell Vida), BanSabadell Pensiones E.G.F.P., S.A., and BanSabadell Seguros Generales, S.A. de Seguros y Reaseguros (BanSabadell Seguros Generales). The transaction was first announced on July 11, 2008, and could be closed ahead of plan.

Jochen Schwarz, Zurich's Head of Bancassurance, has been appointed as the new Chairman and Silvia Avila, former Bancassurance Deputy CEO in Banco Sabadell, as the new CEO of the jointly owned companies.

Zurich said the joint management arrangement demonstrated its "commitment and strong interest to develop jointly life and general insurance business lines and to assure a smooth and effective integration into Zurich."

Source: Zurich - www.zurich.com

House Bill Would Extend Flood Insurance Program 7 Months

2008-09-20T05:53:00.006+07:00

The troubled U.S. flood insurance program would be temporarily extended for seven months under legislation introduced in Congress Thursday, buying time for lawmakers to work out deep disagreements over reforming the debt-burdened program.The short-term extension would prevent the National Flood Insurance Program (NFIP) from expiring as scheduled on Sept. 30. Expiration could further unsettle already fragile U.S. housing markets.

With Texas recovering from Hurricane Ike and the Midwest from heavy flooding, Massachusetts Democratic Rep. Barney Frank introduced the extension bill in the House, saying it would give negotiators time to complete work on a permanent extension and "assess the implications of the 2008 hurricane season."

"I am disappointed that a permanent solution is not before us, but we can and should extend the program while we work on that final bill," said Frank.

It was unclear whether the Senate would agree to the extension, which would move into 2009 any final action on the program insuring millions of homeowners in flood-prone areas.

Big insurers with a stake in the issue include Allstate Corp., Nationwide Financial Services Inc., Fidelity National Financial Inc., Travelers Cos. Inc. and Hartford Financial Services Group Inc.

Congress has been unable to agree on whether to add wind damage coverage to the 40-year-old NFIP, and whether to forgive its $18-billion debt.

The program has been swimming in red ink since Hurricane Katrina slammed into the Gulf Coast in 2005. The devastating hurricanes of that year and 2004 revealed deep problems in the program, but efforts to fix it have been unsuccessful.

The Senate voted in May to extend the program until 2013 and forgive its debt. The House also has voted to extend the program, but added a controversial wind damage coverage clause to its bill and refused to forgive the debt.

On Tuesday, Alabama Sen. Richard Shelby, the senior Republican on the banking committee, said the House would be "making a mistake" if it did not back down and accept the Senate's terms in negotiations over the program.

(Reporting by Kevin Drawbaugh; Editing by Tim Dobbyn)
Copyright 2008 Reuters. Click for Restrictions.

AIG Crisis Restarts Debate Over State vs. Federal Insurance Regulation

2008-09-20T05:53:00.005+07:00

The crisis surrounding giant insurer American International Group has reignited the debate within insurance circles over whether state or federal regulation is preferable.The parent AIG got into trouble with credit transactions that were beyond the oversight of state insurance regulators. These ventures led to the situation that culminated in its $80 billion government loan. However, its insurance subsidiaries remain solvent.

Wasting little time, the insurer trade group, the American Insurance Association (AIA), used the AIG crisis to repeat its call for letting the federal government regulate insurers.

Marc Racicot, AIA president, said the recent turmoil in the financial markets and emergency government loan to AIG highlight a need to revisit the regulatory framework of the property/casualty insurance industry.

"Policymakers should look for solutions that avoid the potential for market crises and consider more effective ways of regulating the financial services sector and protecting consumers without compromising the efficiency benefits that free and open markets provide," Racicot said.

He said that insurers should have the option to be regulated by a federal agency rather than various states.

"For highly-diversified financial services conglomerates that operate in multiple regions of the country and around the world, it makes little sense to continue to single out insurance for regulation on a piecemeal basis at the state level. It makes a great deal more sense for a federal regulator to monitor systemic risk and exercise group-wide supervision on a national basis to ensure safety and soundness," Racicot said.

Not so fast, say state regulators, who point out that the problem with AIG is not its insurance operations that are regulated by them but with risky operations that federal regulators missed.

"The key distinction here is that AIG's insurance subsidiaries did not cause this crisis — rather, they will play a critical role in the solution," maintained Sandy Praeger, Kansas insurance commissioner who also heads the National Association of Insurance Commissioners.

"Calls for federal regulation of insurance in light of these events are simply unable to be supported. State regulatory oversight has kept the AIG insurance subsidiaries solvent, despite the actions of its federally regulated parent and non-insurance entities. If future developments challenge that solvency, there are state insurance regulatory safeguards in place to protect policyholders," she said.

AIG's non-insurance parent company is federally regulated and not held to the same investment, accounting and capital adequacy standards as its state-regulated insurance subsidiaries, according to Praeger. "This allowed various non-insurers to engage in risky credit transactions (huge positions in credit derivative swaps on mortgage-backed securities) without the appropriate limits and minimum capital/surplus to protect the company from a downswing in the mortgage-backed security markets," she said.

She predicted that it will likely be the insurance subsidiaries — or their blocks of business and assets — that will be sold in an attempt to return the AIG parent company to a more stable financial position.

The NAIC has established a working group to oversee AIG insurance interests in the current financial situation and to coordinate with federal regulators. New York State Insurance Superintendent Eric Dinallo is chair of the working group and Pennsylvania Insurance Commissioner Joel Ario will serve as vice-chair.

Under the federal Gramm-Leach-Bliley Act (GLBA), insurance regulatory authority only applies to actual insurance entities and transactions with those entities. Within AIG, there are 71 U.S. insurers subject to this authority. The remaining 176 entities are split between foreign entities and non-insurance U.S. entities. The lead U.S. regulator of AIG financial holding company is the Office of Thrift Supervision (OTS), a federal banking regulator.

Hurricane Ike to Cost Insurers $7B to $12B, RMS Says in Revised Tally

2008-09-20T05:53:00.004+07:00

Risk Management Solutions (RMS), the catastrophe risk modeling firm, has refined its estimate for U.S. onshore and offshore insured losses from Hurricane Ike to $7 to $12 billion from its original estimate of $6 to $16 billion.This estimate includes both onshore and offshore losses resulting from strong winds and storm surge but does not include losses covered under flood policies issued by the National Flood Insurance Program, or loss of oil and gas production due to pipeline supply interruptions.

The revised estimate is based on analysis of damage reports, verified wind speed and tidal gauge observations, and on-site assessment from multiple reconnaissance teams.

"Our reconnaissance teams have focused on evaluating wind and storm surge damage in the landfall region, and they have found that despite some severely affected coastal areas, Ike wasn't as damaging as initially feared," commented Dr. Christine Ziehmann, director of model management at RMS. "While the 75- story JPMorgan Chase tower was extensively damaged, the majority of downtown Houston had minimal damage. They also found that most of the large industrial facilities, including the oil refineries, escaped significant flooding or other damage, though they are dependent on power being restored to regain operations."

She said that one of the remaining uncertainties will be how much of the onshore loss will be paid out under flood or wind policies, particularly for the destroyed coastal communities of Bolivar, which were subject to some of Ike's strongest winds and storm surge.

Losses to offshore oil and gas platforms will contribute a relatively small proportion of the total insured losses for Ike, since winds and waves offshore were generally within the design levels for the platforms.

Source: RMS
www.rms.com

Property Insurer Affiliated FM Offers 'Green' Endorsement on All Risk Policy

2008-09-20T05:53:00.003+07:00

Middle-market commercial property insurer Affiliated FM has introduced a new 'green' coverage endorsement to its proVision all-risk property policy.The green endorsement provides flexible coverage for the additional costs of repairing, replacing or rebuilding damaged property using environmentally responsible practices, green alternatives and to whatever level of green standards a policyholder chooses.

The endorsement limit, which has no built in sub-limits, also covers the potential increased time and associated business interruption that may occur when undertaking green, sustainable practices and securing third-party certification from green authorities.

Coverage also includes:

Additional costs to replace damaged roofs with green roofing systems, including vegetative roofing systems

Additional costs for the green removal, disposal and recycling of damaged property

Air flushing with 100 percent outside air for establishing healthy indoor building environments

Replacement filtration media for ventilation systems

Costs to hire an accredited green consultant to assist in green design and reconstruction

Affiliated FM is a member of the FM Global Group.

Source: Affiliated FM
www.affiliatedfm.com/green

Gallagher & Co. Acquires San Antonio's Summit Insurance Group

2008-09-20T05:53:00.002+07:00

Illinois-based Arthur J. Gallagher & Co. announced it has acquired Summit Insurance Group in San Antonio, Texas. Terms of the transaction were not disclosed.Established in 1997, Summit Insurance Group offers a wide range of employee benefit consultation and brokerage services for their Texas clients. The firm specializes in group medical, dental, life and disability insurance with an emphasis on planning, design, implementation, cost containment and plan administration for group businesses with 50 or more employees.

L.P. "Buddy" Morris and his associates will continue to operate in their current location under the direction of John Neumaier, South Central Regional executive vice president of Gallagher's employee benefit consulting and brokerage operations.

Source: Arthur J. Gallagher & Co., www.ajg.com/

Ratings Recap: AIG (Taiwan) Lehman Re, Swiss Re (Denmark), Connaught, Allianz (Austria), China Insurance. (Singapore)

2008-09-20T05:53:00.001+07:00

Standard & Poor's Ratings Services has lowered its long-term counterparty credit rating and insurer financial strength rating on AIG General Insurance (Taiwan) Co. Ltd. (AIG Taiwan), to 'A' from 'A+'. S&P also placed the ratings on CreditWatch with negative implications. The downgrade follows S&P's action in lowering its long-term counterparty rating on American International Group Inc. (AIG) to 'A-' from 'AA-', and its short-term counterparty credit rating to 'A-2' from 'A-1+' [See related article, as the short-term rate has now been upgraded to 'A-1+']. S&P also noted that it had lowered its ratings on most of AIG's insurance operating subsidiaries to 'A+' from 'AA+'. All of these ratings remain on CreditWatch with negative implications. ""The rating action mainly reflects the AIG group subsidiaries' reduced flexibility in meeting additional collateral needs and the increasing risks tied to residential mortgage-related losses," explained credit analyst Chang. The rating adjustments on AIG Taiwan mainly reflect the decline in implicit parent support, given the company's strategically important position in the group and the group's weaker financial strength.A.M. Best Co. has downgraded the financial strength rating (FSR) to 'B' (Fair) from A- (Excellent) and issuer credit rating (ICR) to "bb" from "a-" of Bermuda-based Lehman Re Limited, and has assigned a negative outlook to both ratings. Best noted that Lehman Re is "a wholly owned reinsurance subsidiary of Lehman Brothers Holding Inc., and the decision of Lehman Brothers to petition for Chapter 11 bankruptcy protection has prompted these rating actions." Best added: "While Lehman Re is not included in the bankruptcy petition, A.M. Best believes that the pending reorganization of Lehman Brothers could have a significant adverse impact on Lehman Re. A.M. Best had expected that the balance sheet of Lehman Brothers would be a source of capital for Lehman Re, if needed." Best also remains "concerned about the future of ongoing operating ties such as the securities activity between Lehman Re and other Lehman Brothers' affiliates, the administrative and investment management services provided to Lehman Re by other subsidiaries of Lehman Brothers and the inability of Lehman Brothers to refer potential insurance clients to Lehman Re."

A.M. Best Co. has withdrawn the financial strength rating of 'A' (Excellent) and issuer credit rating of "a" of Swiss Re Denmark Reinsurance A/S (Swiss Re Denmark) and assigned a category NR-5 (Not Formally Followed) to the company. "These rating actions follow the announcement that Swiss Re Denmark has merged with Swiss Re Europe S.A. (Swiss Re Europe) (Luxembourg), a subsidiary of Swiss Reinsurance Company," said Best. "The consolidation of the European reinsurance business under Swiss Re Europe is part of Swiss Re's plan to optimize its legal entity structure in the European Union. Swiss Re Europe has been gradually assuming the assets, liabilities and ongoing businesses of Swiss Re's various reinsurance subsidiaries and branches in Europe."

A.M. Best Co. has affirmed the financial strength rating of 'B+' (Good) and the issuer credit rating of "bbb-" of Guernsey-based Connaught Insurance Company Limited, the captive insurance company of Thomas Greg and Sons Limited (TG&S), a printing and security specialist. The outlook for both ratings is stable. "The ratings of Connaught reflect the company's solid and improving risk-adjusted capitalization supported by strong underwriting performance," said Best. "An offsetting factor remains the continued significant reduction of the cash in transit that was the major business line for the captive. The reduction arises as a result of the complete disposal of a security company in Columbia by TG&S group in 2008 who was the main client."

A.M. Best Co. has affirmed the financial strength rating (FSR) of 'A+' (Superior) and issuer credit ratings (ICR) of "aa" of Allianz-Elementar Versicherungs-AG and Allianz-Elementar Lebensversicherungs-AG (both of Austria). The outlook for all ratings is stable. Concurrently, Best withdrew both companies' ratings at their request and assigned the FSR a category NR-4 and the ICRs an "nr".

A.M. Best Co. has assigned a financial strength rating of 'B++' (Good) and an issuer credit rating of "bbb+" to China Insurance Co. (Singapore) Pte. Ltd. (CICS). The outlook for both ratings is stable. Best explained: "The ratings reflect CICS' diversified underwriting portfolio, solid distribution network, conservative investment strategy and adequate risk-adjusted capitalization. The ratings also acknowledge operational support from its affiliation within China Insurance Group pertaining to investment and reinsurance capacity. With an operating history of 70 years, CICS has established a strong distribution network with agents and brokers that generated 87 percent of gross premiums written in 2007. In addition, the company continues to strengthen its direct sales and build up its bancassurance channel by partnering with some Chinese banks. A.M. Best believes that a wider distribution platform will enable CICS to further expand its product reach going forward."

Calif. Insurance Commissioner Considers 2010 Bid

2008-09-20T05:53:00.000+07:00

California Insurance Commissioner Steve Poizner, a wealthy Silicon Valley entrepreneur with a centrist political style, took an initial step toward seeking the Republican nomination for governor in 2010.Poizner filed papers with the secretary of state's office to form an exploratory committee as he considers entering the race to succeed Gov. Arnold Schwarzenegger, a fellow Republican who is termed out of office in two years.

Poizner, 51, was elected insurance commissioner in 2006 and is the only other Republican to hold statewide office.

He said he wants to help California be a leader in the global economy, institute reforms to make state government more efficient, improve public schools and bolster the state's water supplies.

"A few years ago, I made a decision that I can't sit on the sidelines and watch California's economy continue to deteriorate," Poizner said in a telephone interview with The Associated Press. "I have this very unique set of experiences and talents that I want to apply to the governorship of California."

By forming an exploratory committee, Poizner can start raising money and conducting polls.

One other Republican -- former eBay Inc. president Meg Whitman -- also has been mentioned as a possible Republican candidate, although she has not publicly disclosed her intentions.

Former Massachusetts Gov. Mitt Romney, who earlier this year bought a home in the San Diego area, has been floated as a possible candidate. His spokesman, Eric Fehrnstrom, said that Romney has no "political designs" for office in California. He added that Romney remains a resident of Massachusetts.

The winner of the Republican primary will face a well-known Democratic challenger.

San Francisco Mayor Gavin Newsom has formed an exploratory committee, while Attorney General Jerry Brown, who served as governor from 1975 to 1983, has said he's contemplating the job. U.S. Sen. Dianne Feinstein and Los Angeles Mayor Antonio Villaraigosa also are possible contenders for the Democratic nomination. Lt. Gov. John Garamendi announced his candidacy earlier this summer.

If Poizner enters the race, he could face a difficult climb in the Republican primary. He would be a pro-choice candidate from the San Francisco Bay area who has donated to both Republican and Democratic candidates.

In his announcement, Poizner released a list of 21 moderate and conservative Republican state lawmakers who have endorsed him --proof, he said, that he can unite the party.

"I think conservative Republican voters will focus on the fact that we will agree 100 percent on what we need to do to get California's economy back on track," Poizner said.

He won the praise of conservative Republicans earlier this year when he led opposition to a February ballot measure that would have modified term limits for state lawmakers, extending the time some current legislators could remain in office. He spent $2.5 million of his own money to help defeat the initiative.

Poizner made his fortune as head of SnapTrack, which developed technology that allowed global-positioning satellites to help emergency-services workers pinpoint the locations of cell phones. He sold the company in 2000 to telecom giant Qualcomm for about $1 billion.

He then spent a year as a public school teacher and worked as a White House fellow at the National Security Council on counterterrorism issues.

Poizner dipped into his personal finances to win his current post, outspending former Lt. Gov. Cruz Bustamante by more than 7-to-1 in 2006. The $17 million he spent during the campaign came primarily from a family trust.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Florida's Citizens Property Insurance Corp. Seeks Suggestions

2008-09-18T22:36:00.005+07:00

Florida-backed Citizens Property Insurance Corp. will host a series of policyholder forums in Miami-Dade, Broward and Palm Beach Counties from Sept. 23-25."Citizens proactively seeks input from our policyholders through these forums," said Paul Palumbo, Citizens' senior vice president of underwriting. "Given our high concentration in southeast Florida and recent changes for our coastal customers, we look forward to this availability and talking with them about their concerns, needs and policies."

Citizens' staff and members of senior management will be on hand to answer questions from the audience.

The forum in Miami-Dade County will be held Sept. 23 at 4 p.m. at the Marriott Dadeland in Miami.

The Broward County forum is scheduled for Sept. 24 at 4 p.m.at the Airport Sheraton in Dania.

The forum in Palm Beach County is set to take place on Sept. 25 at 4 p.m. at the Crowne Plaza in West Palm Beach.

Source: Citizens Property Insurance Corp.

Court: Insurer Can't Bring Subrogation Claim Against Attorney

2008-09-18T22:36:00.004+07:00

Insurers are not allowed to bring equitable subrogation actions premised on professional negligence against attorneys, the Colorado Court of Appeals has ruled.According to State Farm Fire and Casualty Co., as subrogee of Running Bear Homeowners Association v. Robert G. Weiss and Weiss and Van Scoyk LLP, attorney Robert Weiss ddrafted a association covenant for Running Bear Homeowners Association. The HOA wanted to amend its covenant to limit rental periods to not less than 30 days, and Weiss incorrectly advised his client that they could make the amendment without the consent of people who owned the individual units.

When a unit owner sued the HOA for lost rental income, the HOA settled, and then submitted a claim to State Farm for $52,000.

State Farm then initiated an equitable subrogation action against the attorney, based on the theory of professional malpractice. Weiss claimed State Farm couldn't bring a professional negligence claim against it because State Farm was not the attorney's client -- the HOA was. Yet State Farm opposed the motion and submitted the HOA's waiver of its attorney-client privilege. The trial court granted the motion.

"If we allow insurers to bring equitable subrogation actions premised on professional negligence against attorneys. There is no question that allowing such claims will increase the number of lawsuits. This burdens both the legal profession and the justice system and would ultimately restrict the availability of competent legal services," the appeals court wrote.

The appeals court ruled that the trial court properly dismissed State Farm's claim, and the case was remanded for an award
of reasonable attorney fees incurred on appeal.

For more information, visit www.lawyersusaonline.com/pdfs/WEISS99310730.pdf.

Source: Colorado Courts

Insurers Seek Veto of California Workers' Comp Bills

2008-09-18T22:36:00.003+07:00

The American Insurance Association says three measures on the way to California Gov. Arnold Schwarzenegger's desk should be vetoed because they will increase employers' costs for workers' compensation, weaken the utilization review process and bring uncertainty back to the system.Thus, AIA has sent letters requesting vetoes for SB 1717 (Perata), AB 2969 (Lieber) and SB 1115 (Migden).

"SB 1717 will undermine the current rulemaking efforts by the Division of Workers' Compensation (DWC) to amend the Permanent Disability Rating Schedule. DWC's regulatory process should be allowed to proceed because its suggested changes are based on appropriate studies and supporting data," said Steve Suchil, AIA assistant vice president, state affairs. "AIA is requesting a veto of SB 1717 because it will also significantly raise the cost of workers' compensation coverage for employers by increasing the number of benefit weeks for each level of disability. Similar bills have been vetoed in the past."

AB 2969 (Lieber) would ban medical treatment utilization review by physicians licensed in states outside California.

"This bill will hamper the use of utilization review, limit the number of physicians available to conduct reviews, cause delays in treatment and increase system costs," said Suchil. "The DWC has full authority to bring administrative remedies if there are abuses or problems."

SB 1115, authored by Carol Migden (D-San Francisco) is intended to discourage discrimination against protected classes in the permanent disability benefit apportionment process.

"We fully concur with the intent behind SB 1115, unfortunately this bill will create uncertainty in the permanent disability determination process and result in unintended consequences," said Suchil. "Bottom line: this bill is not necessary. Current law protects against discrimination based on age, race, religion, sex, sexual orientation, or other factors. The DWC and the Workers' Compensation Appeals Board already have the ability to address improper discrimination in the process."

AIA has sent letters to Governor Arnold Schwarzenegger-R requesting his veto of all three measures.

For information, visit www.aiadc.org.

Gallagher Acquires UK's Oxygen Insurance Managers

2008-09-18T22:36:00.002+07:00

Oxygen Holdings Plc, a London market insurance intermediary, and Arthur J Gallagher (UK) announced the sale of Oxygen's underwriting subsidiary, Oxygen Insurance Managers Ltd. (OIM) to Gallagher (UK), for an undisclosed sum.Gallagher's bulletin noted: "OIM is a Financial Services Authority (FSA) authorized underwriting agency representing a number of major insurance companies and Lloyd's Syndicates, acting directly or through a local intermediary. OIM specializes in international classes of insurance such as liability, extended warranty, cargo and specie, property, and group personal accident and travel. Sian Fisher and her associates will continue to operate out of their current Fenchurch Street location as OIM Underwriting Ltd. under the direction of David Ross, CEO of Arthur J. Gallagher (UK) Limited, Gallagher's FSA-authorized broker and approved Lloyd's of London broker."

Oxygen Holdings stated that Fisher would "remain on the Board of Oxygen Holdings Plc as a non-executive director." The two companies have worked closely together. OIM will continue to maintain "a strong trading relationship with Oxygen's broking subsidiary, Oxygen Insurance Brokers, Ltd., and continue to share office space in Fenchurch Street, London," said Oxygen's bulletin. "Clients, insurers and carrier partners will be unaffected by the sale."

Ross commented: "This strategic acquisition illustrates our continued approach to measured growth. Having traded successfully with OIM for a number of years we believe their professionalism and entrepreneurial spirit is a perfect fit for our organization. Our companies share similar culture and values, particularly as regards client service."

Nigel Barton, Chief Executive Officer, Oxygen Holdings Plc, added: "We have been approached by a number of parties in recent months interested in acquiring the agency operation - a demonstration of the fact that this type of business model has gained real traction.

"After careful review and assessment, we decided that Arthur J Gallagher presented an opportunity that worked well for all stakeholders - shareholders, staff, clients & carriers. Gallaghers provides a larger, international platform from which OIM will be better placed to fulfill its potential."

Fisher noted that OIM "has made considerable progress since its creation in 2004 and achieved great results from a standing start. This arrangement enables us to build upon our historical trading relationship with AJ Gallagher, and also, to establish collaboration between two entrepreneurial businesses which will drive OIM forward."

Source: Oxygen Holdings - www.oxygeninsurance.com and Arthur J. Gallagher - www.ajg.com

Japan Insurers, QBE Seen Eyeing AIG Assets; China Less Likely

2008-09-18T22:36:00.001+07:00

Japan's well-capitalized and acquisitive insurers and Australia's top player are seen as potential buyers if reeling U.S. heavyweight AIG sells assets, analysts and fund managers said.However, China's ambitious insurers are expected to be more cautious given market turmoil at home, industry watchers said.

American International Group, once the world's most valuable insurer, was rescued from potential bankruptcy late on Tuesday when the U.S. Federal Reserve agreed to lend it up to $85 billion over two years in exchange for a near 80 percent stake.

Given the hefty interest rate on the loan -- 850 basis points over LIBOR -- AIG is under pressure to offload assets, such as its huge aircraft leasing business.

It was not immediately clear if insurance businesses might come up for sale, although the Wall Street Journal reported earlier this week that AIG, which operates in more than 100 countries, might sell Transatlantic Holdings, its New York-listed reinsurance group. Swiss Re and Munich Re have been mentioned as potential buyers.

Analysts also said Canadian life insurance company Manulife Financial Corp would be interested in some of AIG's businesses.

Japanese insurers, looking to grow beyond a stagnant home market, have been acquirers of late and continue to keep their eyes open for deals.

"It's a no-brainer," said CLSA analyst Yuin Lim in Hong Kong. "If you have a non-growing mature market, excessive capital, you have a big war chest there."

In July, Tokio Marine Holdings agreed to pay $4.7 billion for property insurer Philadelphia Consolidated Holding Corp. Tokio Marine had earlier purchased Lloyd's insurer Kiln Ltd. for £442 million ($789 million).

In another sign of the Japanese industry's outward focus, Nippon Life Insurance said in August it would raise 50 billion yen ($474 million) to strengthen its capital and invest abroad.

However, Koichi Ogawa, chief portfolio manager at Daiwa SB Investments, said potential Japanese buyers were unlikely to emerge in the near-term. "I think it would take quite some time to split up AIG and sell it off, considering the due diligence. This is a company that's had a financial crisis," he said.

AUSTRALIA, CHINA
In Australia, industry leader QBE Insurance Group Ltd, rebuffed in a bid earlier this year for local rival Insurance Australia Group, is the likeliest buyer of AIG assets that might come up for sale, a fund manager said.

"The only one likely to show up as interested is QBE. AIG is a vast organization with bits throughout the world, there certainly would be bits that QBE would be interested in," said Mark Nathan, portfolio manager at Fortis Investment Partners.

While China's big state run financial firms have bought significant minority stakes in western peers, Beijing has become gun-shy recently as overseas acquisitions rack up paper losses and domestic markets swoon.

The Shanghai Composite Index is off 63 percent this year, eroding investment profits at big players China Life Insurance, Ping An Insurance and PICC Property & Casualty, which is 9.9 percent owned by AIG.

"It's not likely for Chinese insurers to acquire AIG's overseas businesses," said Gong Jinping, analyst at China Merchant Securities.

China Life has expressed interest in investments abroad but said recently it needs to be cautious given global uncertainty.

Ping An bought 5 percent of Belgian-Dutch financial group Fortis for $2.67 billion last year. But its $3.33 billion deal for half of Fortis' asset management unit has had its approval delayed by Beijing, according to Fortis.

"For one thing, it's too risky to buy overseas assets now. On the other hand, Chinese insurers themselves are suffering from weakening repayment abilities and don't have enough capital for big acquisitions," Gong said.

(US$1-105.54 yen=0.5599 pound) (Additional reporting by David Dolan in TOKYO, Mette Fraende in SYDNEY, Samuel Shen and Heorge Chen in SHANGHAI and Kirby Chien in Beijing; Editing by Louise Heavens)
Copyright 2008 Reuters. Click for Restrictions.

AIG Woes Offer Double Benefit for Insurance Rivals

2008-09-18T22:36:00.000+07:00

Insurance rivals stand to reap the benefits from the woes of American International Group, snapping up assets AIG is forced to sell while gaining greater pricing power as AIG pulls in its claws.Zurich Financial Services and other insurance rivals are the possible winners say analysts who see AIG emerging from its current troubles with less weight to throw around.

"The first consequence we see is that it should be a positive for the P&C (property and casualty) industry," said JP Morgan analysts in a research note.

"This effectively represents a withdrawal of capacity (or capital) from the marketplace ...Pricing in the P&C market is driven by capital -- the less capital, the less pressure there is for prices to fall."

The likely withdrawal of billions of dollars of AIG capital from the sector will put a brake on the slide in prices in the commercial insurance market, where premiums had been forecast to fall by up to 20 percent due to intense competition.

AIG has for a long time been a dominant player in corporate insurance, with an 11 percent share in the U.S. market, as well as for other big-ticket risks such as aviation.

Now, intermediaries predict that although AIG will continue underwriting, it is likely to lose business clients.

"In our view, ZFS is probably the clearest winner," said JP Morgan.

One senior executive at an insurance broker who spoke on condition of anonymity saw others benefiting as well: "Zurich and ACE are likely to be the beneficiaries, maybe even AXA. Anyone with a multinational network will be a winner."

"It's still early days, but it's my view that AIG is a wounded animal. It will be hard for us to say to clients 'We'll place your business with a company who we have no idea what its ownership or management structure will look like in six months' time,'" said the broker.

FIRESALE?

AIG's rescue calls for the U.S. Federal Reserve to lend up to $85 billion to AIG for two years in exchange for a 79.9 percent equity stake.

AIG will pay interest at a steep 8.5 percentage points above the three-month London Interbank Offered Rate, equal to about 11.4 percent. That gives AIG a big incentive to embark on a massive asset sale programme to pay back the loan quickly.

Insurance rivals are set to jostle to pick up attractive parts of the AIG empire, assets which include profitable aircraft leasing arm International Lease Finance Corp (ILFC).

AIG's stake in reinsurer Transatlantic Re, its market-leading operations in central and Eastern Europe and Asia would all be attractive assets, analysts say.

Munich Re has registered its interest in picking up AIG assets, but it is likely to face stiff competition, with Japan's well-capitalised and acquisitive insurers and Australia's QBE also seen as potential bidders.

Analysts say Canadian life insurance company Manulife Financial Corp., the biggest life insurer in North America by market value, might consider acquiring AIG's U.S. variable annuity business, and Manulife executives have said they would like to enter the Japanese and Chinese wealth-management markets.

"If you take out all the financial services business, AIG had a classic life and property/casualty insurance business and it was very profitable. They made good money," said Thomas Noack, insurance analyst at WestLB.

"This... represents an opportunity for those companies either with cash, or with access to cash (via leverage), to build out their portfolios," said JP Morgan.

"AIG has some attractive assets in our view. We are now undoubtedly in a buyer's market in our opinion, although we expect a lot of competition for the assets."

(Editing by Jason Neely)
Copyright 2008 Reuters. Click for Restrictions.

Ohio Insurance Director Urges Residents to Inspect for Wind Storm Damage

2008-09-17T06:59:00.000+07:00

The Ohio Department of Insurance is advising residents to move quickly to check for storm damage to homes and vehicles. Insurance Director Mary Jo Hudson says if your property was hurt by high winds on Sept. 14, take notes and photographs, and contact your insurance company as soon as you can.

The Ohio Insurance Institute says a standard homeowners, renters or auto insurance policy will cover much of the damage from wind gusts, falling trees and flying debris.

However, the industry group says insurance typically won't pay to replace trees. And, you normally won't be compensated for food that spoils in a power outage, unless you purchased special "refrigerated property coverage.''

Remnants of Hurricane Ike whipped Ohio with winds of up to 78 mph.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Heffernan Insurance Brokers Appoint Maciorowski Vice President in Missouri

2008-09-17T06:56:00.000+07:00

Heffernan Insurance Brokers today announced the appointment of Greg Maciorowski as vice president in its Midwest practice group, based in Missouri.In this role, Greg will be charged with new business development for property and casualty risks, focusing on large construction risks in the Midwest.

Prior to joining Heffernan, Maciorowski handled one of the nation's largest general contractors for Aon. Before working with Aon, he was the manager of Zurich's construction practice in St. Louis. During his six years at Zurich, he grew the operation to become the second largest construction office located in St. Louis serving many of the premier construction firms in the area.

Maciorowski graduated from the Illinois Institute of Technology in Chicago, with a BS in civil engineering. He was raised in Chicago and has resided in St. Louis with his family since 1999.

Headquartered in Walnut Creek, Calif., Heffernan Insurance Brokers identifies itself as one of the largest independent insurance brokerage firms in the U.S.

Source: Heffernan Insurance Brokers

Bermuda Association Explains Reinsurance Risk Spreading Role

2008-09-17T06:18:00.000+07:00

"The global reinsurance market plays an integral role in spreading US hurricane risk around the world," said a bulletin from the Association of Bermuda Insurers and Reinsurers (ABIR). "Without it, the risk would be concentrated in a single state (or geographic region) or in the US with the result being higher insurance costs for US consumers."The ABIR noted that "the reinsurers of US hurricane risk are predominantly located outside of the United States with a very large number located in Bermuda." Many of them are ABIR members.

ABIR president Brad Kading explained the following:

1. Bermuda's insurers and reinsurers understand property catastrophes including hurricanes. We understand the tragedy they create for families who lose loved ones or lose their homes. Hurricane Ike has the potential to cause a tremendous loss of life. ABIR member employees themselves are exposed to hurricane risk in Bermuda and they are familiar with what families and businesses need to do to protect themselves against these storms and to recover from those losses. We offer our heartfelt sympathy to those affected so severely by Hurricane Ike in Texas and in the Caribbean prior to the US landfall. 2. Bermuda's insurers provide an estimated 66 percent of the reinsurance purchased by the Texas Windstorm Insurance Association (TWIA). The TWIA protects the property most exposed to hurricane damage in Texas.

3. Based on an analysis of reinsurance premium from insurers most exposed to hurricane risk in Texas, Bermuda's insurers will provide an estimated 45 percent of the reinsurance claims that will eventually be paid to insurers for damage caused by Hurricane Ike. It is impossible to accurately forecast the total insured losses for Ike at this time. All loss estimates at this time are purely hypothetical. However, the more severe Ike's damage is, the more likely it will be that reinsurers pay a larger share of the actual insured hurricane damage. For example, if Ike's insured losses are $10 Billion, insurers will primarily pay for these costs (with exceptions including the TWIA payment noted above). If Hurricane Ike's insured losses are $25 billion, reinsurers may pay $10 to $15 billion of the eventual Hurricane claims. Based on these estimates Bermuda reinsurers' share of these losses may then be $4 to $7 billion.

4. In the period from 2001 to 2008, Bermuda insurers have paid nearly $25 billion in insured and reinsured US property catastrophe losses. These reinsurers have remained financially strong despite these losses and these reinsurers have remained committed, and indeed have expanded, their capabilities to provide protection to US insurers and their property insurance clients. These reinsurers in turn in 2006-2008 continued to provide protection to support US consumers and expanded their capacity (either through their own underwriting capacity or via capital markets resources) to provide even more protection to US consumers.

5. It is estimated that following Hurricane Katrina, Bermuda reinsurers paid out enough to rebuild 45,000 homes in Louisiana and 24,000 homes in Mississippi.

6. The lessons of the last decade indicate that Bermuda's reinsurers, and global reinsurers generally, are: financially strong, capable of absorbing enormous losses, capable of raising capital when needed and committed to continuing to provide US property insurance and reinsurance protection.

7. Bermuda's reinsurers are well regulated by the Bermuda Monetary Authority and have very high financial strength ratings and are well capitalized to absorb these losses. Losses such as these are expected by reinsurers. Reinsurers will reimburse their US insurance company clients promptly as claims are submitted. Reinsurers are financially strong enough to pay all these claims and more.

8. ABIR has 23 member insurance companies, all based in Bermuda. 14 of these companies have US subsidiary insurance companies. These US subsidiaries will also write US insurance for hurricane risk. Thus many ABIR members will be paying claims both from their US subsidiaries and their Bermuda parent corporations.

9. Important hazard mitigation statistics: As a result of a stronger building code passed by Florida after Hurricane Andrew (1992), the number of claims for property damage was reduced by 60 percent, and losses were reduced by 42 percent, when another major hurricane struck the state in 2004 (Hurricane Charley closed claim study, Institute for Business and Home Safety, 2004). But it is estimated that adoption of hazard mitigation measures by every homeowner would reduce hurricane property losses caused by a 1/100 year storm by 61 percent in Florida, 44 percent in South Carolina, 39 percent in New York, and 34 percent in Texas (Wharton University, Managing Large Scale Risks, March 2008).

10. ABIR members employ more than 10,000 people in the United States.

For more information please contact: Brad Kading, 202 783 2434 or Bradley.Kading@ABIR.bm.

Source: the Association of Bermuda Insurers and Reinsurers - www.ABIR.bm

Lloyd's Sees NAIC's Decision on Reinsurance Collateral 'This Month'

2008-09-17T06:14:00.000+07:00

A bulletin on the Lloyd's web site (www.lloyds.com) notes that the National Association of Insurance Commissioners (NAIC) has confirmed it will meet "to consider the proposal to end collateral requirements before the end of this month."Lloyd's has led the efforts, in conjunction with other "alien reinsurers," to convince the U.S. regulators to do away with the need to post collateral to operate as a reinsurer in the U.S.

"Confidence was high among the attendees of this year's Monte Carlo Rendezvous of an imminent change in the current regulatory structure that requires non-US reinsurers to post collateral of 100 percent of potential liabilities that may arise from any business they write in the US," said Lloyd's.Speaking in June at the Lloyd's New York City Dinner, Lloyd's Chairman Lord Levene said the U.S. and Europe shouldn't be pitted in competition. "One of the issues that European reinsurers complain about is US reinsurance regulation, which discriminates according to geography rather than financial strength," he stated.Last year New York and Florida both took their own steps towards a relaxation of collateral requirements [See IJ web site - http://www.insurancejournal.com/news/national/2007/10/18/84395.htm and http://www.insurancejournal.com/news/southeast/2008/04/29/89537.htm].

Sean McGovern, Director, General Counsel at Lloyd's, stated: "All well regulated reinsurers should be treated equally, whether domiciled in the US or in other countries, and shouldn't be required by regulators to put up collateral for the reinsurance they write.

"We welcome the NAIC's continued work on its Reinsurance Framework proposal. This is a significant step in the right direction: towards the total abolition of collateral requirements, which we favor.
"It's also encouraging that they are recommending federal involvement to help them implement the proposals across all States."A spokesman for the NAIC confirmed that regulators had presented a draft proposal, which they will discuss on September 22.

Source: Lloyd's

Best Reports on Canada's P/C Insurers

2008-09-17T06:09:00.000+07:00

"Canada's property/casualty insurance sector is stable, but strong capitalization and profitability provide the ingredients for continued softening in the market," indicates a new report from A.M. Best on the country's insurance industry.Best also noted that "pricing is down across major commercial lines, returns are diminishing, and profits are expected to continue falling until rates recover.
"Net income for 2007 was about C$4.6 billion [US$4.31 billion], down 3.5 percent from 2006. The operating ratio was 83.1, up from 82.3, while return on equity was 15.0 percent, down from 17.1 percent."Best added that, "numerous and severe summer and winter storms marked 2007, and harsh weather continued into the first half of 2008, affecting property and automobile claims. Net underwriting income in 2007 was C$2.3 billion [US$2.16 billion], down 18.1 percent from 2006, and the combined ratio increased to 93.2 from 91.5. Auto insurers' 2007 net loss ratio increased to 70.8 from 67.5."However, Best also indicated that the "personal property net loss ratio held relatively steady at 66.7 in 2007, compared to 66.4 the year before. Commercial property insurers' net loss ratio jumped 4.1 points to 56.2. Net investment income was up 12.6 percent in 2007, but growth was slower than in 2006."Best said it "projects further declines in profits through 2008 amid challenging underwriting and investment conditions."BestWeek subscribers can download a PDF copy of all full special reports or a combination of the report and all related spreadsheet files of the report data at no charge at: www.bestweek.com.
Nonsubscribers can visit www.bestweek.com for pricing information or call customer service for more information at (908) 439-2200, ext. 5742.

Source: A.M. Best - www.ambest.com

RMS Estimates Ike Insured Losses up to $200 Million - So Far

2008-09-17T06:06:00.000+07:00

Risk Management Solutions estimates that the damage wreaked by Hurricane Ike in the popular Turks & Caicos Islands and Bahamas at between $50 million and $200 million. RMS said the majority of the losses were due to "wind and storm surge damage, as well as loss amplification, where pressure on the supply of goods and services drives up prices.The report said, "Grand Turk Island bore the brunt of Ike's winds and storm surge, and accounts for more than 70 percent - or $35 million to $140 million - of the total loss. Reports indicate 90 percent of all properties had wind damage. Around 20 percent of the total loss can be allocated to the south-eastern Bahamas, with the rest coming from the North and South Caicos Islands."RMS also made some preliminary comments on Ike's expected landfall along the Texas coast (See related articles). Where it will come ashore is still uncertain, but RMS pointed out that both Galveston and Houston "will be well within the extent of hurricane force winds. The intensity at landfall is forecast to be category 3. Dr. Ziehmann, director of model management at RMS added: "Ike has now become an exceptionally broad storm, and as a result the majority of offshore platforms will feel its impact to some degree. Onshore, a vast area will also be affected by damaging winds if Ike retains its size, and officials in Texas are already instigating mass evacuations of much of the coastline."

Source: Risk Management Solutions - www.rms.com

Arizona Public Safety Personnel Costing Millions in Insurance Claims

2008-09-17T06:02:00.000+07:00

Tucson and Pima County officials say injured police officers, firefighters and sheriff's deputies are costing taxpayers millions in insurance claims.According to records from the city and county, injured firefighters and police officers have, since 2002, cost Tucson $14 million in insurance claims.Over the same time span Pima County has paid out $6.2 million dollars in claims to injured deputies.The state says injuries to Tucson firefighters and police officers are double the state average.The Industrial Commission of Arizona reported that in 2005, the most recent year for which data is available, there were 10.9 injuries for every 100 full-time employees working in public safety activities in the state, and 10.3 of those were injuries to police.Of those injuries, about 2,300 total, 500 involved time off to recover from injuries and 400 involved light duty.In Tucson in 2007, the police department's 1,100 officers sustained 256 injuries and the city's 700 firefighters had 268 injuries.The state says it works out to 23.3 injuries per 100 officers and 38.3 injuries per 100 firefighters.Over the past five years, the city has paid between $800,000 and $3 million per year on medical expenses related to police injuries, and between $330,000 and $715,000 per year on hurt firefighters.
In Pima County in the past five years, it paid between $252,000 and $988,000 per year on costs related to injuries to its 500 or so sheriff's deputies.
Both Tucson police and fire department officials say they are working to cut down the number of injuries to public safety workers.It is department policy that firefighters get yearly physicals, said Capt. Norm Carlton, a spokesman for the Tucson Fire Department. Peer fitness trainers work closely with the city-appointed doctor to address any trends the doctor notices.
The number of firefighter injuries is up because the number of firefighters increased by about 170 from 2002 to 2008 and the department has gradually placed more emphasis on reporting all injuries, especially exposures to potentially dangerous substances, Carlton said.The Tucson Police Department has also made changes to reduce injuries, spokesman Sgt. Mark Robinson said.
"There are things that we would do in the 70s that we would never consider doing now," Robinson said, referring to detailed pursuit and arrest policies.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Insurance Trade Group Honors U.S. Sen. Collins of Maine

2008-09-17T05:51:00.000+07:00

The National Association of Mutual Insurance Companies (NAMIC) named Sen. Susan M. Collins, R-Maine, as its Federal Legislator of the Year.

"Senator Collins has a great understanding and appreciation of the property/casualty insurance industry, which she gained while serving as the Maine Commissioner of Professional and Financial Regulation, which oversaw the Bureau of Insurance," said Chuck Chamness, NAMIC's president/CEO. "Senator Collins has taken a leadership role on many insurance issues before Congress."

In presenting Collins with the award, Chamness specifically pointed to Collins' efforts to extend the government's terrorism risk backstop program and to reject legislative attempts to repeal the McCarran-Ferguson Act. "She is committed to promoting competition that results in more choices and lower prices for consumers and continues to fight against efforts to repeal McCarran-Ferguson," he said.

Collins has also been instrumental in efforts to protect the current regulatory system of insurance. "Regarding insurance regulation, Senator Collins understands the importance of the states' role in regulating the property/casualty insurance industry and that reform needs to take place at the state level rather than in the creation of a new federal regulator."

Collins said her commitment to state-based regulation stems from her five-year role overseeing Maine's Insurance Bureau. "I know what a good job most states do in regulating the industry and serving their consumers," she said. "Frankly, I was surprised when Secretary Paulson proposed an optional federal charter," a reference to the Treasury Department's recently released financial regulation "blueprint."

Source: NAMIC

Insurance Execs See Significant Sub-Prime Impact on 2009 Results

2008-09-17T05:43:00.000+07:00

Insurance executives expect sub-prime and other credit issues to continue to have a significantly negative impact on the industry's financial performance in 2009, and they see credit and pricing risks as posing the most significant challenges over the next three to five years, according to a survey conducted by KPMG, the audit, tax and advisory firm.At KPMG's 20th annual Insurance Industry Conference held in New York, 82 percent of the 375 executives attending said they expect the credit crisis to have a significantly or extremely negative impact on 2009 performance, compared to just 14 percent who said the problem would be finished by the end of this year.

In 2007, only 55 percent felt that the sub-prime issues would have a negative impact on the financial results and performance.

Additionally, 36 percent of the execs expect the risk associated with
adequately pricing insurance products, referred to as pricing risk, to be the most significant challenge over the next three to five years, followed closely by credit risk, identified by 32 percent of the respondents."The next few years will be very challenging for many insurers in terms of turning the page on credit issues and in strengthening balance sheets," said Scott Marcello, partner, Insurance Industry Leader at KPMG LLP. "While executives have been keenly aware of the sub-prime and other credit risks, overall many members of the insurance and broader financial services industries do not seem to have clearly and fully understood their exposure."

According to the KPMG survey, insurance executives indicated that the industry as a whole did not do a good job understanding its exposure to the credit and sub-prime issues in 2008. In fact, 40 percent gave the industry a grade of 'D' or 'F', while only 19 percent assigned a grade on 'B' or better. Forty-one percent assigned a grade of 'C'. Ironically, in the 2007 KPMG survey, 72 percent of executives indicated that they were confident their companies had a firm grasp on their exposure to the sub-prime market and related risks.

As to when the economy will recover, 72 percent expect that it will
require more than a year for a substantial economic recovery. Only 23
percent think a substantial recovery will occur in less than one year.

With regard to how they see their own companies performing in the year ahead, 39 percent indicated that they expect their companies to perform below or significantly below expectations, while only 22 percent expect performance to exceed expectations. These views are in stark contrast with those expressed in 2007, when 53 percent expected company performance to be above expectations while only nine percent saw their companies falling short of expectations.

However, in rating the industry's ability to generate underwriting
profits over the next one to three years, 59 percent rate the increase as moderate and 37 percent weak. This is only slightly more pessimistic than a year ago when 64 percent said moderate and 29 percent said weak. Only three percent expect profits to be strong, which is down from seven percent in
2007.

"As expected, with clear concerns about the economy and other risks, executives are tempering their expectations," added Marcello.

According to the KPMG survey, executives expect increased consolidation in the insurance industry, with 68 percent of respondents indicating that they see an increase in M&A compared to the past 12 months, including 19 percent who see M&A activity increasing significantly. That is an increase of eight percentage points over 2007 survey results, when 59 percent expected an increase.

Source: KPMG LLP
www.kpmg.com

Bank Insurance Brokerage Earnings Break Highest Mid-Year Level

2008-09-16T06:56:00.000+07:00

Mid-year earnings from bank insurance brokerage hit their highest level ever in the first half of 2008.Bank insurance brokerage earnings in the first six months of 2008 were $2.12 billion, up 6.4 percent from $1.99 billion in the first half of 2007, according to the Michael White-Symetra Bank Fee Income Report. Growth slowed in the second quarter, however, as insurance brokerage revenues of $1.04 billion were 3.4 percent lower than the $1.08 billion in first quarter 2008. So far this year, 3,142 banks or 41.2 percent of all banks reported earning some insurance brokerage income.Banks over $10 billion in assets continued to have the highest participation (72.4 percent) in insurance brokerage activities that produced $1.73 billion in income in first half 2008, 11.3 percent more than the $1.56 billion they produced in first half 2007. These large banks accounted for 81.6 percent of all bank insurance brokerage fee income earned in first half 2008.
Nationally, Citibank N.A. (New York) reported insurance brokerage earnings of $743 million as of June 30, 2008, putting it in first place. Branch Banking and Trust Co. (North Carolina) ranked second nationally with $420.5 million in insurance brokerage fee income. FIA Card Services N.A. (Delaware), the former MBNA America Bank, N.A. now owned by Bank of America Corp., ranked third with $136.1 million in insurance brokerage revenue. Bank of America, N.A. (North Carolina) and BancorpSouth Bank (Mississippi) rounded out the top five in insurance brokerage income in first half 2008.Banks with assets between $1 billion and $10 billion registered $213.6 million in first-half insurance brokerage income, down 20.4 percent from $268.4 million a year ago. Their revenue represented 10.1 percent of total insurance brokerage income generated by banks. Banks with assets under $1 billion achieved a 4.3 percent increase, when their first-half insurance brokerage income rose from $168.7 million in 2007 to $176.0 million in 2008. Among these smaller banks, nearly two-fifths (39.7 percent) reported insurance brokerage income in first half 2008.
Among banks with assets under $1 billion, the leader with $10.8 million in insurance brokerage income in first half 2008 was the small, $88 million-asset, Florida-based Banco Popular, N.A., a subsidiary of the large Puerto Rico-based bank holding company, Popular Inc. The Adirondack Trust Co. (New York) was second with $4.6 million. Rounding out the top five were Spirit of America National Bank (Ohio), Bank First National (Wisconsin), and The Oneida Savings Bank (New York). Among these top five small banks, insurance program Concentration, i.e., ratio of insurance brokerage income to non-interest income, ranged from 51 percent to 93 percent, well above the mean Insurance Program Concentration Ratio for all banks of 5.2 percent. Seven of the top 10 banks in insurance brokerage income exceeded that mean ratio, and five had Concentration Ratios between 15 percent and 56 percent.Compiled by Michael White Associates LLC (MWA) and sponsored by Symetra Financial, the report measures and benchmarks banks' performance in generating insurance, securities brokerage, annuity and mutual fund fee income. It is based on data from all 7,622 commercial and FDIC-supervised savings banks operating at the end of second quarter 2008.
Bank insurance brokerage fee income consists of commissions and fees earned by a bank or its subsidiary from insurance product sales and referrals of credit, life, health, property, casualty, and title insurance. It does not include income earned from the sale or servicing of annuities. Banks' insurance income represents only a portion (historically, roughly one-third) of the banking industry's total insurance income, which will be revealed more completely in several weeks when year-to-date bank holding company fee income data at the end of second quarter 2008 becomes available.

Source: Michael White Associates LLC

Chubb Expands Multinational Insurance Coverage Capabilities

2008-09-16T06:51:00.000+07:00

The Chubb Group announced that it has"expanded its multinational insurance group to encompass both Chubb's standard P/C products and specialty coverage, such as directors and officers liability insurance. Chubb added that with additional "dedicated employees" located "around the globe," its Multinational Risk Group is "now organized to provide customer-centric solutions that cross product lines and geographic boundaries."
Kathleen S. Ellis, Chubb Sr. VP and Multinational Risk Group manager, explained: "Multinationals face a host of complex and changing exposures, and we see those challenges extending to directors and officers and other executive liability insurance lines," said. "We know our agents, brokers and customers can't afford to experience lengthy waits for local policies or make multiple contacts for one insurance program. By addressing the entire commercial insurance spectrum for multinational customers within one unit, we can make the process as easy and efficient as possible."Chubb described the Multinational Risk Group s working through its "international network of branches, affiliates and correspondent brokers to coordinate underwriting, claims and loss control for multinational customers.
"The group facilitates the placement of underlying insurance in local markets and the coordination of controlled master programs, which include difference-in-conditions and difference-in-limits insurance that provides consistency in scope of insurance and service for a business' operations worldwide. It can also help agents and brokers forge relationships with correspondent brokers in the markets in which their customers require the placement of locally admitted insurance policies."

Source: Chubb Group - www.chubb.com

West Virginia Insurance Department Going Paperless

2008-09-16T06:50:00.000+07:00

The West Virginia Insurance Commission sent a heads-up to all insurance companies licensed to do business in the state, informing them that the department will accept only electronic rate and form filings beginning in 2009.Insurance Commissioner Jane L. Cline said, effective Jan. 1, 2009, the West Virginia Offices of the Insurance Commissioner will no longer accept paper filings. All insurance rate, rule and form filings must be submitted via the system for electronic rate and form filing (SERFF). All fees due in connection with such filings must be paid with electronic funds transfer (EFT). Any paper filings received after the effective date will be returned to the filer without review.
Insurers, rating organizations and authorized filers can subscribe to SERFF by contacting SERFF at (816) 783-8787 or via e-mail at serffmktg@naic.org. Additional information regarding SERFF and EFT may be obtained by visiting www.serff.org. Insurers and other filers are encouraged to take formal training so they can fully utilize the SERFF system. Contact information regarding training can be found at the SERFF Web site at http://www.serff.org/training.htm. A variety of formats are available, including online training.
Cline said insurers are strongly encouraged to immediately begin making arrangements to use SERFF and EFT exclusively -- prior to the deadline. She also encourages insurers that use authorized filers to immediately notify those entities so that they can make arrangements to be SERFF and EFT compliant prior to the deadline.

Source: West Virginia Offices of the Insurance Commissioner

Central Insurance Names Eikenbary Vice President-Treasurer

2008-09-16T06:47:00.000+07:00

Central Insurance Companies has promoted Thad R. Eikenbary to vice president-treasurer for both Central Mutual Insurance and All America.Eikenbary has been employed by Central Insurance for 17 years. He has held positions as a commercial underwriter, accountant, senior accountant, general accounting coordinator, corporate accounting manager and, most recently, assistant vice president-treasurer. He holds the associate in insurance accounting & finance designation.
Central was founded in Van Wert, Ohio in 1876, and provides insurance for automobiles, homes, and businesses to more than 321,000 policyholders in 19 states.

Source: Central Insurance Companies

Hanover Adds Employer Liability Insurance to Small Business Policy

2008-09-16T06:42:00.000+07:00

The Hanover Insurance Group, Inc., a super regional property and casualty company, is now including employment practices liability insurance (EPLI) coverage as an endorsement to every eligible new and renewal Avenues Commercial Package Policy (CPP).This new endorsement promises to protect small and mid-sized businesses against employee allegations of job discrimination and wrongful termination. The EPLI coverage is designed to help businesses with up to 50 employees (51 to 250 by referral), that Hanover says traditionally shy away from costly stand-alone EPLI policies."Employment practices liability coverage has evolved from a high-priced option for large employers to an affordable necessity for all businesses," said David J. Firstenberg, president, commercial lines at The Hanover. "In today's workplace, small and mid-sized business owners must defend themselves against damaging employment claims. Our new program provides broad coverage and services that are specifically designed and priced for this market."
The features of the Hanover EPLI include:
Coverage for real exposure, such as employee allegations of sexual harassment, job discrimination, wrongful termination, mental anguish and emotional distress
Optional third-party coverage available at an additional premium
Broad coverage with up to $250,000 limit (higher limits available)
No separate underwriting process or application
Specialized claim services
Access to experienced EPLI law firms
Protection for agencies against errors and omissions claims

Source: The Hanover
www.hanover.com

Florida-based Comegys Insurance Acquires Jakhotia Insurance Group

2008-09-16T06:41:00.000+07:00

St. Petersburg, Florida-based Comegys Insurance recently acquired Tampa-based Jakhotia Insurance Group. The employees of both firms will combine all operations in Comegys' offices in St. Petersburg effective immediately.Deepak "DJ" Jakhotia established Jakhotia Insurance in 1998. Jakhotia specializes in hotel/motels insurance coverage and retail segments throughout Florida.

Comegys Insurance Corner was founded in 1939 and is ranked by Insurance Journal (April 2008) as the 77th largest property and casualty insurance agency in the U.S.

Source: Comegys Insurance Corner
www.comegys.com

Meadowbrook Insurance Group Announces Founder Segal to Retire

2008-09-16T06:30:00.000+07:00

Michigan-based Meadowbrook Insurance Group, Inc. recently announced today that its founder and chairman, Merton J. Segal, will retire as an employee of the company effective Sept. 30, 2008.Segal, 79 years old, founded Meadowbrook in 1955 as Meadowbrook Insurance Agency. Under his leadership, Meadowbrook has grown from a start-up local retail agency into a leading specialty risk management insurance company.Segal will continue to serve on the board of directors as a non-executive chairman and will also be a consultant to the company effective Oct. 1, 2008.
"Retiring at a time of record sales and profitability provides me with a great deal of satisfaction and fills me with a debt of gratitude to all the people who have played a part in the company's success," Segal said.Robert S. Cubbin, Meadowbrook's president and CEO said, "He has demonstrated a lifetime of achievement in the insurance industry. Mert is one of the most respected pioneers in the field of "alternative risk management."

Source: Meadowbrook Insurance Group

Wells Fargo Adds Managing Director of Insurance Operation in Atlanta

2008-09-08T12:54:00.000+07:00

Wells Fargo Insurance Services Inc. added Emanuel (Manny) Lauria Jr. as managing director of its Atlanta office.Lauria will oversee all operations of the Atlanta office, including new business development, customer satisfaction and retention, revenue growth and profitability.Lauria will report to Julian E. Smiley, senior vice president.Lauria will also lead the delivery of international risk services, sharing this responsibility with Jim Gervang, who is based in the west. Along with Gervang, Lauria will serve as a senior technical and international business development advisor, reporting in this capacity to Kevin T. Kenny, regional managing director. Lauria will join Gervang and Patrick Hickey, director of international employee benefits, in overseeing international services provided to customers through the Wells Fargo Global Broker Network (formerly HLA Global) and other intermediaries around the world. The Network currently has 10,000 brokerage professionals operating from 330 offices across 70 countries - providing insurance brokerage services in a total of 115 countries.
Lauria joins Wells Fargo from Wachovia Insurance Services, where he was southern region managing director. Prior to Wachovia he spent more than 20 years with Marsh Inc., where he held a number of risk management and leadership positions.

Source: Wells Fargo Insurance Services Inc.

Alabama Beach Pool Reports Progress on Coastal Insurance Issues

2008-09-05T07:01:00.000+07:00

The Alabama Insurance Underwriting Association, a.k.a. the Beach Pool, released a progress report on a series of coastal insurance recommendations made by a state task force following Hurricane Ivan in 2004. The 20-member hurricane insurance issues task force released its final report in August 2005, just prior to Hurricane Katrina making landfall."Unlike a hurricane which can strike swiftly and forcibly, it often takes time and deliberation to implement changes in policy but members of the Beach Pool are proud to report the significant progress we've made over the past few years," said Robert Groves, AIUA association manager. "The bottom line is that the Beach Pool response to task force recommendations has enhanced our ability to provide coverage to those coastal residents who cannot find an alternative choice in the private market."Groves said the task force divided its work into three committees: alternative markets, coverage restrictions and exclusions and claims coordination. The alternative markets committee managed the majority of Beach Pool issues. Committee recommendations called for the expansion of coverage, change in the make up of the board to include non-industry representation, review of rates, credits for wind mitigation and better construction, redefining territories and the ability to build surplus.

In response to the task force recommendations the AIUA board of directors now includes two public sector members and available coverage is increased to $500,000, as well as replacement cost and theft coverage, Groves said.

In addition, rating zones were redefined to create a Gulf Front territory and credits are available for wind mitigation and homes built to fortified standards. The Alabama Insurance Department Rules reviewed rates in May 2007 and the 2008 State Legislature codified the Beach Pool which previously had been referred to as a voluntary plan, authorizing the plan to retain earnings to build surplus, Groves added.

A complete list of the Task Force recommendations and progress to date is accessible at www.alabamabeachpool.org. AIUA currently insures approximately 10,000 properties with total exposures of $1.7 billion.

Source: Alabama Insurance Underwriting Association

Wholesaler CRC Insurance Acquires Competitor Southern Risk of S.C.

2008-09-05T06:59:00.000+07:00

CRC Insurance Services Inc., the wholesale insurance subsidiary of BB&T Corp., reports it has completed a purchase of Southern Risk Operations LLC.Sumter, S.C.-based Southern Risk is an excess and surplus (E&S) insurance broker that specializes in high-risk personal and commercial properties along the East Coast.

The 18-year-old company also operates branch offices in Miami, Marlton, N.J., Concord, N.H., and Timonium, Md., through its Horan Goldman subsidiary. Horan Goldman was founded in 1963.

Terms were not disclosed.

Birmingham-based CRC reported approximately $3 billion in premiums in 2007. Southern Risk will operate as a division of CRC managing general agency Southern Cross Underwriters. "In our continuing quest to become a complete excess and surplus lines broker, the addition of Southern Risk to the CRC team is an important move that will certainly boost our presence in the managing general agent segment of the industry," said Tom Curtin, chief executive officer of CRC.

"They bring a wealth of experience and provide a great complement to the wholesale and managing general underwriter segments that already exist at CRC."

Southern Risk Operations was founded in 1990 by Jim Mayes, the company's president. It has 78 employees.

Southern Risk's specialty lines include commercial transportation, property and liability, marine, and professional coverage for directors and officers.

CRC acquired Jackson, Miss.-based Southern Cross Underwriters in 2003.

Founded in 1976, the CRC division specializes in small- and middle-market accounts, including property and casualty coverage for coastal homeowners and marine exposures.

CRC has 26 offices and 865 employees across the country. It was acquired by BB&T in 2002.

With $136.5 billion in assets, Winston-Salem, N.C.-based BB&T Corp
is the nation's 14th largest financial holding company.

Source: BB&T Corp.

Estimate of Insured Losses from Gustav Between $2 and $4.5 Billion

2008-09-03T16:32:00.000+07:00

One risk modeling firm estimates that insured losses to onshore properties in the U.S. are between $2 billion and $4.5 billion, with an expected loss of $3 billion due to Hurricane Gustav. According to AIR Worldwide Corporation these loss estimates do not account for any flooding that may yet result from the breach of natural defenses such as levees."Hurricane Gustav not only failed to reintensify during its passage through the Gulf of Mexico, it actually weakened slightly just before landfall," said Dr. Peter Dailey, director of atmospheric science at AIR Worldwide. "For much of Gustav's journey through the northern Gulf of Mexico, Gustav's intensity was regulated by the ingestion of dry air from the west, limiting its ability to reintensify. Heat content in the Gulf waters along the U.S. coastline is significantly cooler and shallower than in the central Gulf, which also prevented the storm from gaining strength."Gustav came ashore on Monday, September 1, morning as a relatively fast-moving Category 2 hurricane with maximum sustained winds of 110 mph and central pressure of 957 mb. Landfall location was near Cocodrie, Louisiana, just west of Port Fourchon and about 70 miles southwest of New Orleans. At landfall, Gustav's hurricane force winds extended outward up to 70 miles and tropical storm force winds extended outward up to 200 miles.

"Since landfall, the center of Gustav has moved inland and already winds are diminishing," continued Dr. Dailey. "On Tuesday, Gustav is expected to be a tropical depression and slowing to a crawl across northeast Texas where it could dump as much as 20 inches of rain in some locations."

Several national television broadcast reports say that the winds in the New Orleans area have diminshed to 60 miles per hour, tropical storm strength, but the damage from wind and the water is evident.

Flooding has been reported in New Orleans' Lower Ninth Ward after crashing waves overtopped a stretch of several hundred yards of the Industrial Canal's floodwall. About half the streets in the ward are under ankle- to knee-deep water. However, according to the Army Corps of Engineers, the overtopping does not pose a major threat and pumping stations are operating. The levee failed during Katrina but has since been strengthened.

If New Orleans has averted major flooding, the same cannot be said for the low-lying stretch of the coast where Gustav made landfall. Cocodrie's Terrebonne Parish, as well as the parishes of Lafourche, Jefferson, Plaquemines and St. Bernard are all virtually at sea level and storm surge from Gustav is expected to play a significant role in these areas. According to the U.S. Geological Survey, a storm surge of close to 9 feet was recorded at Pointe a La Hache—the seat of Plaquemines Parish. The town has an elevation of about 3 feet above mean sea level.

In the oil and gas town of Houma, which crossed Gustav's path, roofing tiles were blown from city hall and homes lost their roof coverings. AIR engineers expect moderate damage to roof coverings, awnings and light metal structures, and more significant damage to mobile homes and automobiles in this area. It should be noted, however, that many automobiles will have been evacuated along with their owners.

"The fears were that Gustav might be a repeat of Hurricane Katrina, which made landfall near Buras-Triumph, Louisiana on August 29, 2005 as a Category 3 hurricane with sustained winds estimated near 125 mph," stated Dr. Dailey. "At landfall, Katrina's swath of hurricane-force winds extended about 120 miles from the storm's center and central pressure was a very low 920 mb. Gustav, however, was both smaller and weaker than Katrina at landfall."

Dr. Dailey continued, "In September 2004, Hurricane Rita made landfall on the extreme southwest corner of Louisiana as a Category 3 storm with sustained winds of 115 mph. Rita, which was slightly larger and slightly stronger than Gustav, is estimated to have caused more than $5.6 billion in insured losses. However, Rita struck a more densely populated area along the Texas/Louisiana border. The parishes south of New Orleans are relatively sparsely populated."

"In the Gulf, the oblique angle of Gustav's track as it passed through the main oil and natural gas producing areas means that it impacted more offshore assets than had the storm made a perpendicular, or coast-normal, landfall," said Dr. Dailey. AIR estimates that Gustav's winds will most significantly affect platforms and rigs in the following protraction areas off the coast of Louisiana: Atwater, Bay Marchand, Eugene Island, Ewing Bank, Grand Isle, Lund, Mississippi Canyon, Ship Shoal, South Delta, South Pass, South Timbalier, and West Delta.

For offshore exposures in the Gulf of Mexico, AIR estimates that ground-up losses (prior to consideration of any insurance terms and conditions) could exceed $10 billion. These losses reflect wind and wave damage to platforms and direct and indirect loss of revenue because of reductions in oil and gas production. However, based on historical loss experience, AIR estimates industry insured losses to offshore assets are between $1.8 billion and $4.4 billion.

Operations in at least nine refineries across the U.S. Gulf Coast and almost all offshore oil output were suspended as Gustav approached. By some estimates, more than 96 percent of Gulf oil production and 82 percent of natural gas output has been closed. However, losses due to mandatory evacuations typically fall below the deductibles (waiting period) for business interruption coverage.

During its swath of destruction across the Caribbean, Gustav is reported to have destroyed tens of thousands of homes in Cuba, toppled trees and power poles and washed out roads, but no deaths are reported there. However, AIR estimates that insured losses from Hurricane Gustav in the Caribbean are unlikely to exceed $100 million.

Elsewhere in the Atlantic, AIR is closely watching Hurricane Hanna, which is currently located 40 miles north of Mayaguana Island in the southeastern Bahamas. Winds have increased to 75 mph and the NHC's current forecast track takes Hanna along the northern edge of the Bahamas and to the U.S. Southeast coast on Friday.

It is important to note that there is still uncertainty with respect to Gustav's actual meteorological parameters and its future track as it makes its way inland. There is also uncertainty around take-up rates for storm surge coverage for commercial exposures. These loss estimates include 10 percent of the total storm surge losses for both residential and commercial properties. To the extent the overall commercial take-up is higher than 10 percent the insured industry loss estimates could be noticeably higher.

Source: AIR Worldwide Corporation, ABC-7 Televisin, National Fox Station, CNN Nightly News

National Insurance Crime Bureau President, CEO Bryant Retiring Today

2008-09-03T16:28:00.000+07:00

Susan Q. Hood, claims vice president, State Farm Mutual Automobile Insurance Company and chair of the board of governors (BOG) of the National Insurance Crime Bureau (NICB) announced today that Robert M. "Bear" Bryant will retire as NICB president and CEO, effective at the close of business today, September 2, 2008.At NICB, Bryant was the force behind the creation of Medical Fraud Task Forces and the Strategic and Tactical Information Department. He supported cutting-edge technology, such as license plate readers, bait cars and enhanced analytical tools for detecting fraud trends. He was an early and consistent voice nudging the NICB membership toward providing their salvage claims data to the public as a consumer protection against unsafe vehicles. His efforts materialized with the launch of NICB's member-supported VINCheckSM vehicle history service on June 30, 2008—a first-of-a-kind free benefit for the public.In acknowledging the tenure of Bryant, Hood stated, "Mr. Bryant was responsible for remaking the NICB into the premier fraud-fighting organization it is today. His leadership, foresight and passion for excellence have touched every facet of NICB's operations delivering efficiency, effectiveness, and a return on member investment that has grown from 2:1 upon his arrival to 8:1 presently. This is truly phenomenal and I know I speak for the rest of the board of governors in wishing Mr. Bryant a satisfying and well-deserved retirement. He will be missed."

The NICB Board elected NICB's Chief Operating Officer, Joseph H. Wehrle, Jr. to succeed Bryant as president and chief executive officer effective at the close of business today, September 2, 2008.

Wehrle is a West Point graduate and retired Air Force Lt. General with over 33 years of service.

"Mr. Wehrle's ability to attack the fraud problem while leading the NICB benefits from his previous experience as president of USAA Property and Casualty Group. He is uniquely qualified to direct the efforts of the NICB as it extends its excellent record of performance into new and challenging areas of insurance fraud activity," Hood said.

The National Insurance Crime Bureau is a national, not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through information analysis, investigations, training and public awareness.
Source: NICB

Jewelry Insurance Workshop

2008-08-30T21:11:00.000+07:00

Attention Florida agents - Enroll in the Sept 2008 Classes!

This fun, information-packed, one-day course for
8 hours CE credit could save your company millions
in jewelry expense and settlement costs!

Adjusters, underwriters, and agents are a company's first-line of defense in mitigating insurance losses.

Learn the fundamentals of jewelry:

how jewelers operate and do business
what's involved in jewelry appraisals
where fraud is likely to occur
how you can help customers
how to improve internal handling procedures
how to cut settlement costs
how ACORD standards protect insurors
lots more (pdf brochure)!

Based on over 800 attendees in the past year, the workshop was rated 4.4 overall on a 5-point scale!

J I W

Welcome to United Marine Insurance's Professional Fishing Boat Quote Centre

2008-08-30T06:41:00.000+07:00

From estuary trawlers to ocean perseiners United Marine is a leader in arranging insurance for Professional Fishers operating anywhere in the Australasian, Pacific and South East Asian regions. We have access to a wide range of specialist insurance underwriters which can lead to substantial savings and a wider more secure cover for your professional fishing boat requirements. Like you, we're not just fair weather sailors, our service is a 24/7 obligation, especially in respect of claims after all we're your broker looking out for you.........GET More Here

Coloradans Spent $26 Billion in Insurance Premiums in 2007

2008-08-30T06:38:00.000+07:00

Where do Coloradans spend their insurance dollars? During 2007, Colorado citizens paid over 26 billion dollars in premium to approximately 1,306 companies, with 27 companies accounting for more than 50 percent of that total, according to the Colorado
Insurance Industry Statistical Report (for 2007) released by the Colorado Division of Insurance.The report reflects some interesting statistics: Although carrying automobile insurance is mandatory, and purchasing health insurance is not, Coloradans spent more in 2007 on accident and health
insurance premiums, which represent 33 percent of the total insurance premiums paid in Colorado. Behind accident and health totals, the second largest premium volume was for annuities, with 16
percent of the total premium. Automobile insurance tied for third place, along with deposit-type funds (such as guaranteed investment contracts), with each accounting for 10 percent of the annual premiums. Life insurance accounted for 7 percent of Colorado's total premiums.

"The statistical report can be very helpful because it illustrates the financial status of companies engaged in the business of insurance in Colorado and reflects which lines of business account for the largest payments of premium by Colorado consumers," said Marcy Morrison, Commissioner of Insurance. "It shows the value that consumers place on insurance, and provides a snapshot of the general financial health of the insurance industry by showing loss ratios as well as premiums earned."

A loss ratio is the ratio between the premiums paid to an insurance company and the claims settled by the company and is usually expressed as a percentage of losses incurred to premiums earned. A
higher loss ratio means that more of the premium dollar went toward claims and benefits, and less to overhead and profit.

The primary purpose of the Annual Statistical Report is to document the financial status of companies engaged in the business of insurance in Colorado. It includes information related to commercial
insurers, health maintenance organizations, non-profit organizations, captives, self-insurance pools and represents figures as of Dec. 31, 2007, the last complete year for which data is available.

To view the 2007 Colorado Insurance Industry Statistical Report, visit:
http://www.dora.state.co.us/insurance/pb/supporting%20documents/mktrFinal2007StatReport082208.pdf.

Source: DOI

Untrustworthy Insurance Agents Will Lose Licenses in Washington

2008-08-30T06:13:00.000+07:00

Insurance agents in Washington state can lose their licenses if they are deemed "untrustworthy."In an important decision, the Washington State Court of Appeals ruled that Insurance Commissioner Mike Kreidler was correct in revoking insurance agent Jack Chandler's license based on the fact that he had shown himself to be untrustworthy in his sales conduct with elderly consumers.The court also agreed with the Commissioner that Chandler attempted to exploit senior citizens by using misleading marketing tactics to get them to buy reverse mortgages, living trusts and long-term care insurance. He also misrepresented himself on his Washington licensing application when he failed to disclose complaints against him in California.

As a result of Chandler's actions, the Insurance Commissioner revoked his insurance license in 2002. Chandler appealed that decision on the grounds that the term "untrustworthy" is unconstitutionally vague and subjective. The court disagreed and upheld the license revocation. Chandler then attempted to appeal to the Washington State Supreme Court, but his petition for review was denied.

"Mr. Chandler preyed on some of our most vulnerable citizens and I cannot allow that to happen," Kreidler said. "While this case took several years to reach conclusion, it was worth every minute. I am very satisfied with the result."

For more information, visit www.insurance.wa.gov.

Source: DOI

Louisiana Insurance Commissioner Says Department on Alert for Gustav

2008-08-30T06:02:00.000+07:00

Louisiana Insurance Commissioner Jim Donelon held a press on Thursday, Aug. 28 to discuss the preparations made by the Department of Insurance (DOI) in the event the state is impacted by Gustav as a major hurricane. The storm is expected to hit the Gulf Coast as early as Monday, Sept.1. Reports show the storm has caused damage, injury and death as it makes its way from Domican Republic and Haiti to the Gulf region.

Commissioner Donelon says the DOI implemented its Continuity of Operations plan (COOP) on Tuesday (Aug.26). The COOP plan ensures that the DOI will continue to function with minimal interruptions in the event of a disaster.

Donelon adds that all divisions of the DOI have met with their staff and each division has a plan ready to implement if Gustav strikes. Preparations made by DOI staff include the following: Insurance Company Emergency Adjuster Registration program prepared in case claims adjusters need to be sent to disaster areas; online registration ready.

· Call center ready to be activated by Property & Casualty Consumer Affairs Division; phone scripts prepared.

· Travel teams assigned and ready for dispatch to Disaster Recovery Centers statewide.

· All insurance company contact information updated and ready to distribute to public and for call center staff.

· Packets of consumer information (complaint forms, brochures, etc.) assembled.

· Employee Emergency Response System ready to instruct staff in case of office closure; all staff emergency communications equipment ready.

· Remote site(s) for meeting with insurance industry selected (England Air Park - Alexandria, Louisiana; Atlanta, Dallas, Houston or Memphis).

· Remote site for DOI operations at England Air Park in Alexandria ready in the event Baton Rouge offices rendered uninhabitable.

· Emergency Insurance Rules prepared.

· Office supplies stocked and computer back up servers ready at remote locations.

Donelon says following Hurricanes Katrina and Rita in 2005, he and the staff of the DOI encountered new situations that have them well prepared for Gustav. "The property destruction caused by those storms forced us to get creative and think of innovative plans for working with consumers and the insurance industry," he says. "I will continually meet with our staff to ensure the continuity of operations of this department if this or any other hurricane impacts our state."

Donelon also offers the following tips for consumers to prepare for an approaching storm:

· Make a record of your personal property. Take an itemized inventory of all furnishings, clothing and valuables to help your adjuster in case of a claim. List model and serial numbers and attach sales receipts if possible. It is also a good idea to take pictures and/or make a video log of each room and the exterior of your home.

· Protect your insurance policies and other important documents. Make sure you keep copies of your policies and your inventory list in a secure place like a safety deposit box, or store them in a watertight box you can take with you in case of an evacuation. Make sure to include with your records the name of the agent who wrote your policy. Let family members or trusted friends know where to find your records in case you are unable to retrieve them after the storm.

· Plan for the worst. Make a plan of action in case a storm hits. Designate two meeting places for your family: a location in your home in case of flash flooding or other immediate disaster, and a location outside your neighborhood in case you cannot return home. Designate an uncluttered, windowless area in a lower level of your home as a shelter, and conduct tornado drills there each season. Have an out-of-state contact that everyone should "check-in with" in case of separation during a storm. It is often easier to call out-of-state during a disaster.

Important Planning Steps:

· Post emergency telephone numbers.

· Show responsible family members how and when to shut off water, gas and electricity at main switches.

· Make sure all battery-operated appliances are in working order and keep back-up radios and flashlights on hand.

· Make emergency arrangements for your pets. Since most shelters will not take pets, you should call your vet or local Humane Society to find out where you can take your pets in case of an evacuation.

There are six basics you should stock in your home to prepare for the worst:

1. Water - store at least one gallon of water per person per day. You should get a three-day supply of water for each person in your household.

2. Food - store at least a three-day supply of nonperishable food items. Select foods that require no refrigeration, no preparation, no cooking and little or no water. Also, make sure the items are compact and lightweight.

3. First Aid Kit - assemble first aid kits for your home and car that include sterile bandages and pads, scissors and sewing kit, soap, antiseptic and nonprescription drugs.

4. Tools and Supplies - make sure you have a flashlight and battery operated radio with extra batteries, cash or travelers checks with change, and sanitation items like personal hygiene supplies and disinfectant.

5. Clothing and Bedding - pack at least one complete change of clothing and sturdy footwear per person. Include blankets or sleeping bags for bedding.

6. Special Items - remember family members with special needs, such as infants and elderly or disabled persons. Remember to pack any special diet foods and pet foods, as well as any prescription medication. Include books and games to pass the time.

7. Protect important personal items such as family photos, etc.

Source: Louisiana Department of Insurance

Connecticut Says Use of Fake Auto Insurance Cards Growing

2008-08-30T05:57:00.000+07:00

Counterfeit auto insurance cards have been a problem for years, say Connecticut insurance officials, but recently, the department's fraud and investigations' divisions have been seeing seen a lot more of the cards.

All Connecticut drivers are required to carry the cards - which show current policy information - in their cars at all times. But a faltering economy mixed with the state's auto insurance requirements has led some to but a phony card in lieu of a policy.

"While, legitimate insurance coverage provides protection for you, your family, and other people injured in a motor vehicle accident, trying to use fake insurance leads only to trouble," the department said in statement.

Driving without insurance is a motor vehicle violation in the state.

For those who believe they were tricked into purchasing illegitimate insurance coverage, the department is urging consumers to verify their agent's licenses, which can be done through the department's home page.

Source: Connecticut Insurance Department

Heartland Analyst Likes Insurance Broker Brown & Brown

2008-08-29T00:36:00.000+07:00

There's value to be found in this rangebound market in areas like insurance brokerages, North American natural gas as well as some industrials, a fund manager said.

Brad Evans, who helps manage more than $2 billion in assets at Heartland Advisors, said he is cautiously optimistic on U.S. equity markets considering a possible recovery in the country's economy sometime in 2009.

"Investors continue to be stuck in that mentality that we need to get international exposure to avoid the U.S. slowdown and I think that's going to turn on itself, maybe it is already," Evans told Reuters from Heartland's offices in Milwaukee, Wisconsin.which has about $502 million in assets, is ranked first on a year-to-date performance basis as of July 31 out of 586 funds in the small-cap value category, data from fund analytics company Lipper, a unit of Thomson Reuters, shows.

Beyond regular valuation metrics for a company such as price-to-earnings and price-to-cash flow, Evans also looks at the private equity market value, or the value of a particular business to a financial or strategic buyer, based on a past completed transaction of a like business.

"We've cast our net and found a new idea. We're very optimistic on Brown & Brown," Evans said.

Brown & Brown, an insurance broker, is likely to benefit from a hardening insurance market where premiums are likely to edge higher given deteriorating combined ratios, increased catastrophe losses and reduced investment income.

Moreover, in early June, Willis Group Holdings, the world's third largest insurance broker at the time, bought smaller rival Hilb, Rogal and Hobbs Co for $1.7 billion.

Based on that deal's valuations, as well as Evans' own projections for Brown & Brown, he feels fair value for the company's shares is in the $28-$30 range over the next 12 to 18 months.

That represents an appreciation of about 30 percent from current levels.

However, Evans is still underweight the financials as a sector.

"While banks may look cheap statistically there's still some downside risk left that isn't priced in," Evans said. "Investing in banks right now is speculative and that's not our cup of tea."

S&P Report Says Oman Insurance Market Still Strong After 2007 Losses

2008-08-28T04:28:00.000+07:00

In its latest report on the insurance market in the Sultanate of Oman, Standard & Poor's Ratings Services says that despite the heavy losses from Cyclone Gonu in 2007, the sector has much to commend it.

"Oman has developed a thriving domestic retail and commercial insurance sector. A buoyant economy and supportive regulatory regime are particular factors in this growth," explained credit analyst David Anthony.

S&P"s report, titled "Growing Opportunities For Insurance And Reinsurance In The Sultanate of Oman," also looks at the details of the changing regulatory environment and how these will affect the market.

"The Capital Markets Authority as Oman's regulator is one of the most respected in the region. We expect the CMA to continue its pragmatic approach to market regulation, moving increasingly to a risk-based capital assessment of insurers' solvency, while avoiding unnecessarily restrictive regulations, thereby allowing the market to continue its positive development," Anthony added.

Source: Standard & Poor's

Higher Gas Prices, Lighter Vehicles Could Mean Higher Insurance Costs, Study Shows

2008-08-28T04:21:00.000+07:00

The cost of auto injury claims involving lighter-weight vehicles tends to be higher than the cost of claims involving heavy vehicles, according to new research from the Insurance Research
Council (IRC).The average claims payment involving lighter weight vehicles is more than 14 percent higher than it is for claims involving heavier vehicles, the researchers said. Injuries in lighter vehicles are more likely to be more serious, require hospitalization and keep people from returning to work right away, they found.The insurance research group said its findings may have implications for those seeking to understand how higher gas prices will affect auto insurance costs. According to IRC, a reduction in the amount of driving is not the only consequence of higher gas prices that could affect automobile insurance costs. IRC says its findings suggest higher gas prices could also lead to higher average claim costs.IRC found that the average auto injury claim payment in accidents involving lighter-weight vehicles was 14.3 percent greater than the average payment in accidents involving heavy vehicles. These findings suggest that, as rapidly rising gas prices prompt more drivers to choose lighter and more fuel-efficient vehicles, the average cost of injury claims arising from motor vehicle accidents can be expected to climb.

"The impact of higher gas prices on drivers, accident severity, and insurance costs is anything but simple," said Elizabeth A. Sprinkel, senior vice president of the IRC. "Our findings indicate that higher
average claim costs associated with lighter vehicles have the potential to offset, to some extent, whatever beneficial effects might occur from less driving. It's far too early to know how all these effects together will influence insurance claim costs."

To investigate the potential impact of rising gas prices on insurance claim costs, IRC analyzed 9,140 personal injury protection (PIP) claims closed with payment in 2007. IRC compared average total claim payments for the lightest 25 percent of the vehicles involved in accidents resulting in PIP claims with average total claim payments for the heaviest 25 percent of vehicles. Only claims involving automobiles, minivans, and sport utility vehicles were examined.
Claims involving fatalities or permanent total disabilities were excluded to eliminate the distorting effects of these few claims on average cost calculations.

Of all vehicles involved in PIP claims closed in 2007, 25 percent weighed 2,771 pounds or less, and another 25 percent weighed 3,726 pounds or more.

The average payment for claims in the lighter-weight group was $5,554, which is 14.3 percent greater than the $4,859 average payment for claims in the higher-weight group.

IRC found additional evidence that it says confirms the greater seriousness of injuries involving lighter-weight vehicles. Among claimants in heavier vehicles, 46 percent lost no time from work following their accidents. In contrast, only 38 percent of claimants in the lighter-weight vehicles lost no time from work.

Claimants injured in lighter-weight vehicles were also 12 percent more likely to be hospitalized following their injury than were claimants in heavier vehicles.

Rapidly rising gas prices are expected to have various consequences for consumers and businesses. One widely-observed consequence is a reduction in the amount of driving, as drivers eliminate unnecessary trips and use more public transportation. IRC said that whether less driving will result in fewer accidents, and, in turn, lower automobile insurance costs, is unclear. But, according to IRC, what is clear is that a reduction in the amount of driving is not the only consequence of higher gas prices that could affect automobile insurance costs. IRC says its research findings suggest higher average claim costs as another potential consequence of rising gas prices.

Source: Insurance Research Council

Ratings Roundup: Stoneheath Re, Insurance Australia, Toa Re

2008-08-28T04:11:00.000+07:00

A.M. Best Co. has removed from under review with negative implications and affirmed the debt rating of "bb+" on $350 million non-cumulative perpetual preferred securities (preferred securities) issued by Stoneheath Re (issuer), a Cayman Islands exempted company. The assigned rating outlook is stable. "Stoneheath Re is licensed as a restricted Class B reinsurer under the laws of the Cayman Islands and was formed to provide multi-year reinsurance capacity to certain insurance and reinsurance subsidiaries (ceding insurers) of XL Capital Ltd (XL Capital) (Cayman Islands)," Best explained. " The terms of the reinsurance agreement between Stoneheath Re and XL Capital provide that upon a payment by the issuer to the ceding insurers, triggered by a catastrophic event, XL Capital will issue and deliver to Stoneheath Re Series D preference ordinary shares of XL Capital (XL preferred securities) in an amount equal to the payment made by Stoneheath Re. Cash from the issuance of preferred securities by Stoneheath Re, which previously had been deposited into a trust account and subsequently disbursed as claim payments, will be replaced by the XL preferred securities."Standard & Poor's Ratings Services has affirmed its 'A+' ratings on Insurance Australia Group Ltd. (IAG) and the 'AA-' ratings on IAG's core operating companies, including Insurance Australia Ltd. and IAG New Zealand Ltd. The rating outlooks on IAG and the core operating companies remain stable. "These rating actions follow IAG's announcement of a net loss after tax of about A$261 million [US$223 million] for the 2008 fiscal year, affected by one-off write-downs and restructuring costs," S&P explained. "The results were also affected by higher claim costs from natural perils as well as mark-to-market impact of widening credit spreads." Credit analyst Thomas Cherian observed: "While acknowledged as poor results,difficulties in the U.K. business and the sustained impact of volatile weather and investment market conditions were already factored into our ratings downgrade on May 7, 2008." S&P then added: "The rating affirmation reflects the group's excellent market positions in Australia and New Zealand, where a majority of its portfolio is in short-tailed lines in which pricing is starting to harden. The group has also maintained conservative reinsurance and reserving practices. The risk management framework continues to be robust and the group is expected to simplify the business model going forward with a heightened focus on expense management, underwriting discipline, and profitability. However, although IAG continues to hold capital well above the regulatory minimum, it is not capitalized to a level consistent with the rating. A.M. Best Co. has affirmed the financial strength rating (FSR) of 'A+' (Superior) and the issuer credit rating (ICR) of "aa-" of Japan's Toa Reinsurance Company, Limited with a stable outlook. Best also affirmed the FSR of 'A' (Excellent) and the ICR of "a" of The Toa Reinsurance Company of America (TRA) (headquartered in Morristown, NJ). The outlook for both ratings is stable. Best said: "These rating actions reflect Toa Re's superior capitalization, excellent underwriting performance in the recent two years and established market presence in Japan. Toa Re's superior risk-adjusted capitalization is reflective of its Best's Capital Adequacy Ratio (BCAR) and low underwriting leverage. The company also strengthened its BCAR ratio over the past two years by disposing of its listed equity. The domestic equity investment decreased to 28.9 percent of total assets as of fiscal year 2007 from 41.8 percent as of fiscal year 2004." In addition Best noted that "Toa Re improved its business portfolio by reducing participation in the competitive motor business while increasing quality lines of business (e.g., life business). The combined ratios in fiscal year 2006 and fiscal year 2007 stood at 85.1 percent and 89.8 percent, respectively. The low combined ratio was attributed to the lack of a major catastrophe event in Japan and to the improved underwriting results over the past two years.
Insurance Journal

Tower and CastlePoint to Acquire Hermitage Insurance for $135M

2008-08-28T04:05:00.000+07:00

Tower Group, Inc. and CastlePoint Holdings, Ltd. announced today that CastlePoint Reinsurance Co., Ltd., a Bermuda-based subsidiary of CastlePoint, has agreed to acquire HIG, Inc.Bermuda-based CastlePoint said it will pay the seller, a subsidiary of Brookfield Asset Management Inc., $27 million in cash plus the adjusted closing book value of Hermitage. The total cash consideration is expected to be approximately $135 million with no external financing required.On August 5, 2008, New York-based Tower entered into an agreement to acquire CastlePoint and they expect to close that transaction in early December 2008. Tower and CastlePoint expect that the acquisition of Hermitage will close in late December 2008, after the closing of the Tower-CastlePoint acquisition.

Hermitage is a specialty property and casualty insurance holding company offering both admitted and excess and surplus products to small commercial customers throughout the eastern United States. Hermitage has two operating subsidiaries: Hermitage Insurance Co. and Kodiak Insurance Co.

The Hermitage transaction represents the acquisition of a profitable book of business and an E&S lines platform covering 29 states and the District of Columbia. The Hermitage subsidiaries also have admitted licenses in 10 states.

The Hermitage transaction will provide access to 150 new retail agents in the Southeast who have no overlap with CastlePoint's or Tower's existing producers and will also further strengthen CastlePoint's and Tower's wholesale distribution in the eastern U.S.

Officials said that Hermitage is expected to produce approximately $100 million in gross written premiums for 2008, and its net loss ratio is 52.3% through the first six months of 2008.

Michael H. Lee, chairman and CEO of both Tower and CastlePoint, explained how the Hermitage and Castlepoint acqusitions are linked.
"The Hermitage acquisition reinforces the post-CastlePoint acquisition strategy that we outlined when we announced the acquisition of CastlePoint by Tower on August 5th. Through this transaction, Tower and CastlePoint will be able to acquire a very profitable business similar to Tower's business by utilizing CastlePoint's capital. In addition, CastlePoint will be able to shift more of CastlePoint Reinsurance Co.'s capital from reinsurance to insurance in response to current market conditions. The transaction further supports Tower's national expansion plans by focusing on underserved market segments through wholesale agents while expanding its retail distribution system in the Southeast," he said.

Tower and CastlePoint also entered into a separate agreement that will occur following CastlePoint's acquisition of Hermitage for $135 million. Tower has agreed to buy Hermitage's operating assets including rights to policy renewals and producer appointments from CastlePoint for $16 million in cash. T

The transactions between Hermitage and CastlePoint and those between Tower and CastlePoint, including any ancillary agreements, are subject to customary regulatory approvals.

Source: Tower and CastlePoint

Florida Rejects State Farm 47% Homeowners Insurance Rate Hike

2008-08-27T05:14:00.000+07:00

Florida Insurance Commissioner Kevin McCarty said he will disapprove the July 16 rate filing submitted by State Farm Florida for a 47.1 percent homeowners insurance rate increase.McCarty's Office of Insurance Regulation (OIR) said the insurer failed to prove that the net reinsurance costs included in the filing did not result in excessive costs in violation of the rating law. The OIR also questioned the profit and contingency factor and the additional retained hurricane risk load that State Farm used in the filing.

The retained hurricane risk load was previously allowed by law, but that provision was repealed in Senate Bill 2860, which became effective July 1 - before State Farm's filing was made.

State Farm now has 21 days, if it chooses, to petition the OIR for an administrative hearing. In the meantime, the company cannot implement the proposed rate increases. Senate Bill 2860 also prohibits companies from implementing rate increases through the "use and file" process, through Dec. 31, 2009.

Had the filing been approved, policyholders in certain parts of Florida could have seen increases of as much as 63 percent, or $8,300 more than their current rates, in Dade County; 70 percent, or $4,800 more per year, in Pinellas County, according to OIR. The smallest requested change was an increase of 19 percent, or an additional $1,376 per year, in Pasco County.

Source: Florida Office of Insurance Regulation
www.floir.com

Colorado Division of Insurance Recovers $7 Million for Insurance

2008-08-27T05:06:00.000+07:00

The Department of Regulatory Agencies, Colorado Division of Insurance reported that it has recovered $7 million for consumers in the first half of 2008. The total represents premium savings and recovered benefits to consumers including:

•$4.7 million from insurers following 2,000 received written consumer
complaints that were in the first six months of 2008, including refunds and restored benefits from the life and health, property and casualty, and compliance and investigations sections;

•$2.2 million was saved for consumers following rate reviews by the
Division's Rates, Forms and Actuarial team -- the team had
the companies use lower rates after reviewing the initial
submissions for rate increases;

•$99,000 restored to consumers by six insurers in March 2008, after
being ordered by the Market Conduct Examinations section to
perform self-audits, which showed consumers were overcharged or had been denied covered benefits.

"Our staff has been diligent and aggressive about protecting consumer rights," said Marcy Morrison, Colorado's Commissioner of Insurance. "We encourage consumers to let us know when there is a problem they can't resolve with their insurance company. We'll review all the documents and help guide consumers through tough insurance questions."

The total recovered consumer money does not include other actions taken to benefit consumers, such as the Kaiser Permanente of Colorado agreement, HealthMarkets settlement, nor any fines and penalties assessed toward companies following market conduct or financial examinations and compliance investigations, the DOI said.

The $4.7 million in consumer savings and restitution represents more than 2,000 cases prompted by written consumer complaints that were opened in the first half of 2008, and represents refunds, restored benefits and other recovered monies that will directly impact consumers who initiated a complaint against an insurer. Analysts in the Consumer Affairs section review consumer complaints, request company responses to the complaints, and help interpret insurance policies and covered benefits so consumers understand their rights and responsibilities. The consumer recovery total also includes title transactions where agencies charged for services not provided or failed to follow closing instructions; and bail bond actions that included return of collateral, and refunds on overcharged premiums.

While the Division of Insurance can't resolve every complaint, most consumers complete the complaint process with a better understanding of the insurance industry. "Often, our role is to explain insurance law or help decipher a policy question for consumers," Morrison said. "While our process may not always result in a restoration of benefits or a refund to the consumer, we work to educate consumers so they make informed decisions in the future."

Between January and June, 2008, the Division's Rates, Forms and Actuarial team reviewed submitted rates and companies reduced their rates by more than $2.2 million. In some cases, the team had the companies use lower rates after reviewing the submissions for rate
increases. Of nearly 2,000 consumer complaints in the first half of 2008, the division said 639 complaints reflected concerns about life insurance, annuities, and health products. Those include HMOs and other medical insurance, as well as accident, disability and dental
insurance.

Another nearly 800 consumer complaints were directed at property-casualty insurance companies, including homeowners and car insurance, between January and June, 2008. Auto protests, which are tallied separately, accounted for another 501 consumer complaints. A consumer has the right to file an automobile protest if an insurer increases the rates, reduces the coverage, or cancels or non-renews the consumer's personal automobile policy.

Missouri Automobile Insurance Plan Opens Doors on September 1

2008-08-27T05:03:00.000+07:00

The Missouri Automobile Insurance Plan (the Plan, the AIP) announced today that it has completed the transition from the Missouri Joint Underwriting Association (MJUA), and has commenced operations. The Plan began accepting applications on August 12, 2008 from eligible applicants seeking effective dates of September 1, 2008 or later.

The Plan is also announced the availability of EASi 2.0, the Electronic Application Submission Interface. Licensed producers can use this product to submit automobile insurance applications electronically to the Plan.

For more information, please visit http://easi.aipso.com. The Missouri Department of Insurance & Professional Regulation approved creation of the AIP to replace the MJUA as the state's automobile insurance residual market mechanism. The Plan provides access to automobile insurance to those eligible applicants who are unable to obtain coverage in the voluntary market.

For more detailed information on the Plan, please visit http://www.aipso.com/MX, or contact the Plan office at 888-706-6100.

Source: The Missouri Department of Insurance & Professional Regulation

Several Insurers Could See Big Fannie, Freddie Losses

2008-08-27T04:55:00.000+07:00

A handful of insurers holding equity in U.S. home-funding giants Fannie Mae and Freddie Mac could see big losses if a federal takeover wipes out the value of the agencies' common and preferred stock, as some investors fear.

"There are a handful (of insurers) that have pretty decent exposure" to Fannie and Freddie equity, said Ed Keane, a senior financial analyst with Oldwick, New Jersey-based ratings agency A.M. Best Co Inc.

To be sure, figures compiled by A.M. Best show that, by and large, U.S. insurers are more heavily invested in debt issued by the mortgage giants and could benefit from a government helping hand.But for equity holders the picture is not as rosy. While it is far from clear how a government bailout could be structured, or when it would come, analysts say it could prove thorny for common and preferred stockholders because federal authorities would likely give debt holders seniority.

Such concerns have since the beginning of the month more than halved the value of Fannie and Freddie shares, which are down about 90 percent since the beginning of the year.

Among the insurers that own significant Fannie and Freddie- issued equity are life insurers Hartford Financial Services Group Inc. and Genworth Financial Inc, according to a research note by Fox-Pitt Kelton analyst Mark Finkelstein Thursday. Allstate Corp, the largest publicly traded U.S. home insurer, is another.

DEBT SENIORITY
Fannie and Freddie, government-sponsored enterprises (GSE) that own or guarantee almost half of all outstanding U.S. mortgages, count on debt markets to help them keep buying mortgages. Their ability to do so is crucial to helping stabilize the worst U.S. housing market since the Great Depression.

As such, if the government moves to shore up capital, it could benefit bondholders, since debt markets are a crucial source of funding for Fannie and Freddie.

Keane, an author of a recent A.M. Best report on the holdings of GSE securities by insurers, said the sector had poured close to $370 billion into fixed-income securities as of the end of 2007.

Insurers own a much smaller percentage of Fannie and Freddie equity -- about $4 billion in all, but that could still prove an issue for some since the holdings appear to be more concentrated.

Catherine Seifert, an equities analyst with Standard & Poor's, said that, for most insurers, losses from Fannie and Freddie are expected to be "manageable."

But she added: "We are probably going to see some outsize exposure company to company."

FKP's Finkelstein said Hartford's stake was about $500 million, or 2.9 percent of equity on a pre-tax basis. Genworth was a smaller 1 percent, according to the research note.

Neither Hartford or Genworth returned calls seeking comment. The shares of both fell Thursday, with Hartford losing 2.24 percent to close at $59.78, while Genworth fell 1.67 percent to $14.72.

Allstate is another insurer that had bought agency equity worth about $128 million at the end of June, according to a quarterly regulatory filing. Allstate shares lost 27 cents to close at $45.05.

By Lilla Zuill
August 25, 2008

New York Freezes Malpractice Insurance Rates

2008-08-27T04:27:00.000+07:00

Gov. David Paterson is freezing medical malpractice insurance rates for a year as he seeks a broader solution to high business costs doctors claim are driving them out of New York.

The freeze heads off a scheduled surcharge due in June 2009 that could have increase some physicians' rates by as much as 30 percent.

The New York Public Interest Research Group says the freeze shouldn't affect patient care and that time is needed to work out the difficult problem of high rates.......LINK

2 University of Alabama Students Earn Insurance Industry Scholarships

2008-08-24T05:17:00.000+07:00

The Derek Hughes/ National Association of Professional Surplus Lines Offices Ltd. Educational Foundation scholarships went to two University of Alabama student.

Recipient Aldrich Callins of Birmingham, Ala. has attended college abroad in the United Kingdom, Japan, Botswana and Australia. He also received a NAPSLO scholarship last year which provided training in a surplus lines agency and company. Aldrich is a board member of the Alabama Insurance Society.

Recipient Kate McCulloch, a senior from Woodstock, Ga., is a director of the Alabama Insurance Society.......LINK

Federal Grants Go to South Dakota Insurance Risk Pool

2008-08-24T05:09:00.000+07:00

Federal grants totaling nearly $725,000 will be used to help defray costs of South Dakota's insurance risk pool and establish a vaccination program for those covered by the risk pool.

South Dakota is one of 30 states receiving a portion of $49 million in grants.

"We think it's going to make good sense in the long run,'' said Randy Moses, assistant director of the South Dakota Division of Insurance......CLICK