INSURANCE NEWSCAST "Headlines Only Edition" for: Tuesday, 01/02/07

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INSURANCE NEWSCAST "Headlines Only Edition" for: Tuesday, 01/02/07  

Here is a quick look at the stories that will be in Tuesday's INSURANCE NEWSCAST.

 

1) UnitedHealth, others to extend Medicare drug date - Herb Kuhn, acting deputy administrator of the Centers for Medicare and Medicaid Services, said the enrollment deadline would be extended until February 15 for an estimated 250,000 people covered by Medicare Part D drug plans. -- The Part D program, which allows health insurers to offer drug coverage under Medicare oversight, was launched in 2006 but allows participants to enroll or change plans once a year.

 

2) Power Corp. to buy Putnam for $3.9 bln ? WSJ - NEW YORK, Dec 29 (Reuters) - Financial services firm Marsh & McLennan Cos. Inc. (MMC.N: Quote, Profile , Research) has agreed in principle to sell its Putnam Investments unit for $3.9 billion to Montreal-based holding company Power Corp. of Canada (POW.TO: Quote, Profile , Research), The Wall Street Journal reported on its Web site on Friday.

 

3) NYSE to close Jan 2 to mark President Ford's death - Fri Dec 29, 2006 9:51am ET - NEW YORK (Reuters) - NYSE Group Inc. said on Friday the New York Stock Exchange will be closed on January 2 to mark the death of former U.S. President Gerald Ford. -- On Thursday, President George W. Bush declared January 2 a national day of mourning for Ford, who died this week, with all federal offices to be closed on Tuesday.

 

4) Three attorneys general sue Acordia - NEW YORK, Dec 19 (Reuters) - Attorneys general for three U.S. states said on Tuesday they had filed suit against an insurance broker unit of Wells Fargo & Co. (WFC.N: Quote, Profile , Research) for allegedly receiving payments to steer clients to insurers. -- Connecticut, New York and Illinois are seeking restitution, penalties, and a change in the way Acordia does business.

 

5) Allstate says to drop Carolina coast home coverage - NEW YORK, Dec 20 (Reuters) - Allstate Corp. (ALL.N: Quote, Profile , Research), the No. 2 U.S. home and auto insurer, said on Wednesday that it was dropping coverage for some 16,000 homeowners on the coast of North and South Carolina in its latest bid to cut hurricane risk. -- Allstate also said it would stop writing new policies in coastal areas of Maryland and Virginia, although it would not cancel coverage for those who already held policies in those states.

 

6) John Garamendi Details His Top Insurance Issues For 2007- Prepares For Transition To Lieutenant Governor - SACRAMENTO ? John Garamendi held his final Capitol news conference as Insurance Commissioner Thursday, taking the opportunity not only to look back, but forward as well. Garamendi reviewed his significant contributions as California?s first elected Insurance Commissioner and then turned his attention toward 2007, highlighting his specific priorities as California?s next Lieutenant Governor and what he sees as the top three insurance issues for the coming year.

 

7) Absence Of Hurricane Losses Drove Improvement In Property/Casualty Insurers? Results Through Nine Months - JERSEY CITY, N.J., Dec. 27, 2006 ? Driven by a sharp decline in catastrophe losses from hurricanes and other natural disasters in 2006, the U.S. property/casualty industry posted a $24.4 billion net gain on underwriting through nine months. The net gain on underwriting through nine-months 2006 stands in stark contrast to the $2.5 billion net loss on underwriting through nine-months 2005.

 

8) Spanish insurer Mapfre eyes new foreign buys - MADRID, Dec 29 (Reuters) - Spanish insurer Mapfre (MAP.MC: Quote, Profile, Research) wants to keep growing abroad via acquisitions following a deal to start insuring cars with Italy's Cattolica Assicurazione (CASS.MI: Quote, Profile, Research), Chairman Jose Manuel Martinez said on Friday. -- Earlier this month, Mapfre signed a memorandum of understanding with Cattolica Assicurazione to develop a joint motor insurance business in Italy. Mapfre will buy a 50 percent stake of the new business for 473 million euros.

 

9) Sterling Financial to sell 3 insurance-related businesses - Dec 27 (Reuters) - Financial holding company Sterling Financial Corp. (SLFI.O: Quote, Profile , Research) said it will sell its three insurance-related businesses as "they never became meaningful contributors to the bottom line."

 

10) China Life raises $3.6 bln in heavily bought IPO - By Andrew Torchia - SHANGHAI, Dec 27 (Reuter) - China Life Insurance Co. (2628.HK: Quote, Profile , Research) (LFC.N: Quote, Profile , Research) said on Wednesday it had raised 28.32 billion yuan ($3.6 billion) in the country's second-largest domestic IPO, which was heavily oversubscribed. -- The offer attracted over 810 billion yuan of subscriptions from retail and institutional investors, a record for a domestic Chinese IPO. The previous record of 718 billion yuan was set in October by Industrial & Commercial Bank of China (601398.SS: Quote, Profile , Research), the country's largest bank.

 

11) Reinsurance rates to rise 50 pct in storm-prone U.S. - NEW YORK, Dec 20 (Reuters) - Reinsurance rates - the prices insurers pay for their own insurance - will rise by as much as 50 percent in storm-prone coastal areas of the United States in 2007, according to chief executives of reinsurers. -- These reinsurance costs which will be paid by property casualty carriers such as St. Paul Travelers Cos. Inc. (STA.N: Quote, Profile , Research), Allstate Corp. (ALL.N: Quote, Profile , Research) and Hartford Financial Services Group Inc. (HIG.N: Quote, Profile , Research) will be passed along to homeowners in higher rates next year.

 

12) Criteria Article Outlines Updated Method Of Assessing Long-Term Care Insurers' Capitalization - NEW YORK  Dec. 26, 2006--Long-term care insurance (LTCI) has long been touted as a product of the future, with still substantial potential yet to be realized. However, market growth has been slowing since the end of the 1990s. From 1998 to 2003, premium grew at a compound annual rate of 16%, according to an article published today by Standard & Poor's Ratings Services. The article, which is titled "Capital Assessment For Long-Term Care Insurers Updated As Market And Products Evolve," says that as measured by new annual policy premium volume, increased pricing in 2004 resulted in industry-wide sales dropping by 25%.

 

13) NEW EXPERT COMMENTARY FROM IRMI.COM - There are now over 800 risk management and insurance articles on IRMI.com. Below you'll find summaries of some recent additions with links to the articles.

THE STRAIN TO RETAIN - Larry Schiffer discusses the symbiotic relationship between the reinsured and the reinsurer.   http://www.irmi.com/Expert/Articles/2006/Schiffer12.aspx

DETERMINING THE OPTIMAL COMBINATION OF RISK RETENTION AND RISK TRANSFER - In his Risk Finance column, Don Riggin provides a financial metric for comparing any combination of retention and transfer. http://www.irmi.com/Expert/Articles/2006/Riggin12.aspx

PUTIN'S RUSSIA IN 2007: WALKING A TIGHTROPE - As we head into the new year, Daniel Wagner updates his article written in 2000 discussing the political climate and need for political risk insurance in Russia. http://www.irmi.com/Expert/Articles/2006/Wagner12.aspx

 

14) Aon Re Study: Global 2006 Hurricane Season Normal -- Despite Light Atlantic Landfalling Activity - CHICAGO, Dec. 28 /PRNewswire-FirstCall/ -- In a year remembered for no landfalling Atlantic hurricanes -- following heavy landfalling hurricane activity in 2004 and 2005 -- global tropical activity was normal, according to a report issued by Impact Forecasting, LLC, a unit of Aon Corporation (NYSE: AOC). -- The combined number of tropical cyclones for the Northern Hemisphere was 31 in 2006, equal to the long-term average. However, more intense tropical cyclones (categories 3, 4 and 5) exceeded historical levels by 45 percent. Less intense tropical cyclones were below the long-term average by 33 percent.

 

15) Benefits Changes to Continue in 2007, Watson Wyatt Says Regulations, Focus on Cost Control Will Drive Change - WASHINGTON, Dec. 28 /PRNewswire-FirstCall/ -- Employees will continue to pick up more responsibility for choosing and financing their benefits in 2007 as companies address new regulations and focus on controlling costs, Watson Wyatt Worldwide, a leading global consulting firm, predicts. Health care benefit trends that Watson Wyatt foresees in 2007 include:

-- Increased focus on high-deductible health plans

-- More benefits information and tools online. 

-- Moving beyond mandatory generic prescription drug plans.

-- Greater integration between health care and absence management programs.

-- More on-site clinics in the workplace.

 

16) The Commerce Group, Inc. To Enter New York and New Jersey Markets Acquires State-Wide Insurance Company - WEBSTER, Mass.--(BUSINESS WIRE)--The Commerce Group, Inc. (NYSE:CGI) today announced that it has entered into an agreement through which it expects to enter the New York personal lines insurance market in 2007. Under the terms of the agreement, ACIC Holding Company, Inc., a subsidiary of Commerce which is jointly owned by Commerce and AAA Southern New England, will acquire SWICO Enterprises, Ltd., the holding company for Hempstead, New York-based property and casualty insurer State-Wide Insurance Company, in a transaction valued at $52 million.

 

17) AssuranceAmerica Corporation Announces Writing of First Louisiana Policy - ATLANTA--(BUSINESS WIRE)--ASSURANCEAMERICA CORPORATION (OTCBB: ASAM), an Atlanta based insurance holding company with operations in Georgia, Florida, South Carolina, Alabama and Texas announced today that it wrote its first auto insurance policy in the state of Louisiana.

 

18) MetLife Signs Lease at 1095 Avenue of the Americas in Manhattan - NEW YORK--(BUSINESS WIRE)--MetLife, Inc. (NYSE: MET) and Equity Office (NYSE: EOP) announced today that MetLife has signed a 21-year lease at 1095 Avenue of the Americas in Midtown Manhattan. MetLife will occupy 12 floors in the building or approximately 410,000 square feet. -- The company expects to begin moving certain operations, including a portion of its employees currently based in MetLife?s Long Island City (LIC), Queens office, into the building, which is owned and is being redeveloped by Equity Office, in the fourth quarter of 2008.

 

19) Goldman Sachs Closes First Infrastructure Fund with More Than $6.5 Billion - NEW YORK--(BUSINESS WIRE)--The Goldman Sachs Group, Inc. (NYSE: GS) today announced it has raised its first GS Infrastructure Partners fund with more than $6.5 billion in committed capital. This is Goldman Sachs? first fund dedicated to making infrastructure investments and will make such investments globally.

 

20) INSURANCE NEWSCAST ?Pictures Of The Day?

 

21) Jimcor Agencies Acquires Federico & Associates - Montvale, NJ - Jimcor Agencies announced an acquisition on Monday of Federico & Associates, a regional wholesaler based out of Lansdowne, Pennsylvania.  ?This transaction further develops our already solid brokerage and binding authority capabilities,? explained James Mastowski, CEO of Jimcor.

 

22) NAIC President To Host Natural Disaster Symposium In Miami - KANSAS CITY, Mo. (Dec. 28, 2006) ? The National Association of Insurance Commissioners (NAIC) will hold its President?s Symposium Jan. 18?19, 2007 at the Conrad Miami Hotel in Miami, Fla. -- NAIC President and Alabama Insurance Commissioner Walter Bell will host the event, entitled Natural Disasters in the U.S. ? Preparing, Responding, Recovering.

 

23) Katrina insurance suit moved to state court - Wed Dec 27, 2006 3:31pm ET - NEW YORK (Reuters) - A federal judge has sent back to Mississippi state court a lawsuit demanding that insurers pay flood damages to thousands of Hurricane Katrina victims, increasing the chances of a ruling against the companies. -- Hood, who brought the suit on behalf of state residents 15 months ago, said that if insurers did not negotiate settlements by spring, he expected Congress, led by Mississippi Senator Trent Lott, to investigate the industry.

 

24) UnitedHealth says SEC launches formal options probe - NEW YORK, Dec 26 (Reuters) - UnitedHealth Group Inc. (UNH.N: Quote, Profile, Research), which has shaken up its executive ranks over questions about how stock options were awarded, said on Tuesday that U.S. securities regulators had launched a formal investigation into its options practices. -- The insurer received a "formal order of investigation" from the SEC staff on Dec. 19 following an informal inquiry in April, it said in a regulatory filing.

 

25) Cardinal Health in $11 mln settlement with Spitzer - By Jonathan Stempel  - NEW YORK, Dec 26 (Reuters) - Cardinal Health Inc. (CAH.N: Quote, Profile, Research), one of the largest U.S. prescription drug distributors, said on Tuesday it will pay $11 million to settle a probe by New York State Attorney General Eliot Spitzer into improper secondary market trading of pharmaceuticals. -- The settlement is the first in the attorney general's probe into trading practices in the market in which wholesalers trade drugs among themselves after they are sold by manufacturers, but before they are bought by pharmacies and hospitals.

 

26) Ernst & Young LLP Issues 2007 U.S. Industry Outlook for Life Insurance Industry - Wednesday, December 20, 2006 - NEW YORK, Dec 20, 2006 (BUSINESS WIRE) -- In 2007 the life insurance industry is looking forward to a year of continued good performance, opportunity and tough competition for the loyalty of a new generation of retiring consumers, according to Ernst & Young's Global Insurance Center.

Six key issues will shape 2007 for the life insurance market:

1. Economic and industry fundamentals:

2. Organic growth:

3. Risk management:

4. Capital management:

5. Finance transformation:

6. Regulatory and compliance

 

27) Chubb Settles with New York, Connecticut and Illinois AGs: No Finding of Chubb Participation in Illegal Bid-Rigging WARREN, N.J., Dec 21, 2006 /PRNewswire-FirstCall via COMTEX/ -- The Chubb Corporation (NYSE: CB) announced today that it has entered into a settlement agreement with the Attorneys General of New York, Connecticut and Illinois, resolving all issues arising out of those officials' investigations of property-casualty insurance market practices. -- Chubb has cooperated fully in the investigations, which have been led by the New York Attorney General's Office. Chubb is pleased that these investigations which were augmented by an independent inquiry commissioned by the company did not conclude that Chubb participated in a pattern or practice of illegal bid-rigging in the excess casualty insurance market.

 

28) Acordia Inc. Disputes Attorneys' General Charges - SAN FRANCISCO, Dec. 19 /PRNewswire-FirstCall/ -- Acordia Inc., the fifth largest insurance brokerage in the nation and owned by Wells Fargo & Company (NYSE: WFC), said it will vigorously defend against allegations brought by the attorneys' general of New York, Connecticut and Illinois. -- "Contingent compensation agreements have been a long-standing and well-known practice in the insurance industry, and these commissions continue to be paid by insurers to hundreds of insurance agents and brokers throughout the country, including New York," said Dave Zuercher, Acordia Inc. President and CEO. "These agreements have been held by courts to be legal and enforceable."

 

29) Milliman Survey Confirms Continued Dominance of Guarantees in Variable Annuity Retirement Income Products - SEATTLE, Dec. 20 /PRNewswire/ -- Results from Milliman's second annual Guaranteed Living Benefits (GLBs) survey of leading variable annuity (VA) carriers indicate that GLBs continue to drive variable annuity sales. -- Total sales of VAs that offered a GLB during calendar year 2005 averaged 87% of total VA sales, stable relative to 2004 results. This figure increased to 89% during the first half of 2006, demonstrating the continued popularity of such benefits.

 

30) Audit Integrity Cites Pension Practices as a Developing Area of Corporate Risk - NEW YORK & LOS ANGELES--(BUSINESS WIRE)--Audit Integrity, LLC, a financial research firm specializing in corporate accounting and governance issues, is warning investors and other corporate stakeholders that pension reforms adopted this year are generating a new set of risks that could surpass, at least in the financials involved, the recent highly publicized options backdating scandals. -- The firm has identified 61 corporations as fitting a ?high-risk profile? characterized by aggressive approaches both in their accounting and corporate governance practices, and in the actuarial assumptions underlying their pension valuations.

 

31) BIG ?I? OPPOSES A.G. INTERVENTION IN INCENTIVE COMPENSATION - ALEXANDRIA, Va., Dec. 21, 2006?The Independent Insurance Agents & Brokers of America (the Big ?I?) is disappointed to see another settlement out of New York Attorney General Eliot Spitzer?s office that bans the payment of contingent compensation that is entirely legal. The settlement is with Chubb Corp. and was joined by the attorneys general of Connecticut and Illinois. -- Chubb?s settlement announced today marks an end to the company?s offering of contingent compensation calculated retrospectively at the end of a production year in all lines of insurance, and the start of a new system of supplemental compensation in 2007.

 

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