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Monday
07/14/08
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Your Insurance News "Strategic
Relationship"
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Read online at
www.insurancebroadcasting.com.
Read daily by
over 450,000 insurance industry
subscribers.
Walt Podgurski, CLU, CES, Publisher & Editor
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2008 TPA Licensing Manual
Compliance Tool Available for Purchase! |
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The Professional Insurance Marketing
Association (PIMA) is the premier forum for the leading Agents/TPAs/Brokers
and Companies in the sponsored insurance and direct marketing arenas.
This 2008 CD-ROM Publication, a benefit of PIMA membership, is now
available to non-members for only $695. The CD contains a guide to state
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To order or for a content preview,
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1.
AIG Shares Slide 5
Percent On Mortgage Fears |
|
Fri Jul 11,
2008 2:03pm EDT
HAMILTON,
Bermuda (Reuters) - Shares of American International Group Inc (AIG.N:
Quote, Profile, Research, Stock Buzz) fell sharply on Friday as
investors worried the giant insurer, already beaten down by
mortgage write-downs, could post more losses.
Concerns that
housing finance giants Fannie Mae (FNM.N: Quote, Profile,
Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile,
Research, Stock Buzz) may be undercapitalized stoked fears
across the mortgage insurance industry. AIG, which sells a broad
range of insurance coverage, has a mortgage insurance division.
"AIG shares
remain under pressure amid ongoing concerns about its exposure
to the troubled mortgage market," said S&P equities analyst
Catherine Seifert in a research note. The analyst added that the
stock's low valuation was "warranted until clearer guidance
emerges on how AIG's new CEO is going to deal with what (is)
seen as its out-sized and multi-faceted exposure to the mortgage
market."
Seifert cut her
target price on the stock to $27 from $30.
AIG shares slid
5 percent to $22.79 on the New York Stock Exchange in afternoon
trading, just off levels last reached in 1995.
The stock has
fallen nearly 78 percent over the past year, as the insurer has
written down billions of dollars in assets linked to subprime
mortgages.
Investors are
concerned that mortgage market losses from other AIG mortgage
units could take more of a bite out of its bottom line.
Apart from
mortgage investments, AIG provides mortgage insurance and has
also been in the business of providing home loans through a
consumer finance unit.
Others in the
mortgage insurance business fared worse, with PMI Group Inc (PMI.N:
Quote, Profile, Research, Stock Buzz) and MGIC Investment Corp (MTG.N:
Quote, Profile, Research, Stock Buzz) losing 16 percent and 17
percent, respectively.
AIG's newly
installed chief executive, Robert Willumstad, last month said
there was no "silver bullet" to quickly close off the insurer's
broad exposure to the mortgage market crisis.
Mortgage
insurers provide coverage for mortgage holders who put down
little or no down payment, paying out in the event of default.
(Reporting by
Lilla Zuill; editing by Jeffrey Benkoe)
© Thomson
Reuters 2008 All rights reserved |
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2.
U.S. Needs Financial
Regulatory Overhaul: Officials |
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By
Mark Felsenthal and Glenn Somerville
WASHINGTON (Reuters) - Policy-makers said on Thursday they were doing
everything possible to restore calm to financial markets, but stressed
to lawmakers that a longer-term regulatory overhaul was vital to avert
future crises.
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry
Paulson told Congress they agreed the Fed needs a stronger hand in
supervising investment banks to help shield the broader economy from
problems like the ones that forced the emergency rescue of investment
bank Bear Stearns.
"The Bear Stearns episode and market turmoil more generally have placed
in stark relief the outdated nature of our financial regulatory system,
and has convinced me that we must move much more quickly to update our
regulatory structure and improve both market oversight and market
discipline," Paulson told Congress.
"We should consider how to most appropriately give the Federal Reserve
the authority to access necessary information from complex financial
institutions ... and the tools to intervene to mitigate systemic risk in
advance of a crisis," he said.
Bernanke, in testimony before the same House Financial Services hearing,
said authorities were doing everything possible within their existing
authority to settle markets roiled by a credit crunch.
NEED TOUGHER SCRUTINY
But he said stricter oversight was needed to supervise large investment
banks and primary dealers that trade securities directly with the Fed,
in light of the disruptions that have battered the U.S. economy.
"Cooperation between the Fed and the SEC (Securities and Exchange
Commission) is taking place within the existing statutory framework with
the objective of addressing the near-term situation," Bernanke said in
comments that echoed a speech he gave on Tuesday.
"In the longer term, however, legislation may be needed to provide a
more robust framework for the prudential supervision of investment banks
and other large securities dealers," he said.
Bernanke added that regulatory standards for capital and risk should
reflect the differences between investment banks and commercial banks.
Both policy-makers agreed that, with presidential elections on the
horizon, it was unlikely that regulatory reforms could be pushed through
this year. But they vowed to continue looking for solutions to restore
market stability.
CAN HANDLE CRISIS
The officials said they could not rule out a further financial crisis,
but could deal with one with existing tools. Paulson said regulators
should get emergency authority to step in to limit temporary disruptions
to financial markets.
But the bar for using such power should be high, he said.
"Any potential commitment of government support should be an
extraordinary event that requires the engagement of the Treasury
Department and contains sufficient criteria to prevent costs to the
taxpayer to the greatest extent possible," he added.
Bernanke said the Fed's decision to extend short-term credit to
investment banks and primary dealers through its discount lending window
facility has eased risks of another run on an institution of the type
that brought down Bear Stearns.
"At some point we would have to phase it out when we felt that the
system had sufficiently recovered," he said.
Paulson also said that Fannie Mae (FNM.N: ) and Freddie Mac (FRE.N: ) --
the nation's top providers of housing finance, which have faced tough
scrutiny amid the subprime mortgage lending crisis -- play a vital role
and should continue to do so.
The stock prices of the two government-sponsored mortgage finance
enterprises have been pummeled because of speculation they face
financial difficulties, and could even be in need of a government
bailout.
"Their regulator has made clear that they are adequately capitalized,"
Paulson said.
Separately, the presumptive Republican nominee for president, Sen. John
McCain, said the government could not allow Fannie Mae and Freddie Mac
to fail in a crisis.
Paulson, in discussing regulatory reforms and the need to overhaul the
financial regulatory system, argued that it was vital to maintain market
discipline as a guiding force.
"Regulation alone cannot eliminate all future bouts of instability,"
Paulson said. He added that market participants should not count on
getting lending from the Fed or any other government support easily.
"For market discipline to effectively constrain risk, financial
institutions must be allowed to fail," Paulson said.
(Additional reporting by Emily Kaiser, Patrick Rucker, Doug Palmer,
Joanne Morrison, and Karey Wutkowski; Editing by Jan Paschal)
©
Thomson Reuters 2008 All rights reserved |
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3.
Insurance Commissioner
Poizner Announces A $255 Million Dollar Rate Cut For Allstate
Policyholders
|
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Poizner has Approved Nearly $1.7 Billion in Rate Cuts Since Taking
Office
LOS ANGELES – Insurance Commissioner Steve Poizner today ordered a 28.5%
reduction in insurance premiums for California homeowners, a total
savings of $255 million for Allstate policyholders.
“Gas prices are soaring, unemployment is on the rise and many
Californians find it increasingly harder to simply pay their mortgage,”
said Commissioner Poizner. “In today’s sputtering economic environment,
people need all the help they can get just to pay the bills. That’s why
I am pleased to order this tremendous rate cut today, which will save
homeowners a quarter of a billion dollars on their insurance. As the
state’s leading consumer advocate, I will continue to make sure that
California’s market remains competitive and that consumers receive the
best and fairest rates possible.”
Allstate initially filed for a 9.3 percent increase in their homeowners
insurance rates. After a hearing on their application, Commissioner
Poizner ordered a 28.5 percent rate decrease, the amount of reduction
that had been recommended by the administrative law judge. Under the
rate reduction announced today, Allstate customers will save an average
of $242 per policy, per year. Allstate, at the time of its rate filing,
was the third largest homeowners insurer in California, with 1.1 million
policyholders and 13.4 percent market share. The order is available at
www.insurance.ca.gov.
Since elected, Commissioner Poizner has approved nearly $1.7 billion in
rate reductions for California drivers and homeowners. Recent rate cuts
include:
$30 million rate reduction for Fireman’s Fund homeowners and insurance
policyholders
$61 million rate reduction for Mercury auto, renters and homeowners
policies
$250 million rate reduction for Allstate auto insurance policyholders
$100 million rate reduction for AAA of Northern California
$65.8 million rate reduction for GEICO customers
In April, Commissioner Poizner issued new regulations to clarify and
streamline the prior approval rate system, making the rate filing
process more efficient, accurate and transparent. The Commissioner’s
regulations also help to speed the approval of rate reductions so
consumers can see savings sooner. |
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4.
Allstate Comments on
California Homeowners Rate Ruling |
|
RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--Allstate Senior Corporate
Relations Manager Peter DeMarco today issued the following statement
regarding the California Department of Insurance’s order to lower
Allstate’s homeowners rates in California by 28.5%:
“While we are disappointed in this order, we respect the authority of
the Department and will comply. We are reviewing the order in detail and
communicating with the Department about the process for adjusting the
rates of our 850,000 homeowners policyholders in the state. Californians
can continue to rely on more than 1,300 Allstate agents to help them
with insurance and retirement needs.”
www.allstate.com |
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5.
Insurance
Broadcasting Celebrates 11th Anniversary |
|
Cleveland, OH –
07/11/08 –
“InsuranceBroadcasting.com is please to be celebrating our 11th
anniversary today” said Walt Podgurski, CEO of Insurance Broadcasting.
“While we are pleased for the success of our two main services;
INSURANCE NEWSCAST and the Workplace Benefits Association, it might be
more interesting to go through the list of services (there have been
many) that didn’t quite work out the way they were originally intended”
Mr. Podgurski continued. “But, we will save those stories for another
day except to make the point that you can make a lot of mistakes and
still survive provided that your focus is on the user experience and you
control expenses.”
Originally incorporated as the National Association Of Professional
Enrollment Specialists (N.A.P.E.S.), on 07/11/1997, the organization
changed names to the Benefits Marketing Association and then to the
Workplace Benefits Association. Currently the Workplace Benefits
Association has over 6,000 members.
www.workplacebenefits.org
Early on (January of 1999), Insurance-Letter was started with only 300
subscribers. The name was later changed to INSURANCE NEWSCAST which
presently has over 450,000 subscribers.
www.insurancebroadcasting.com
The INSURANCE MEDIA ASSOCIATION was formed in the fall of 2003 to become
the premier network for professionals engaged in insurance media,
including; PR, advertising, branding & marketing. It has grown to over
700 members. Job categories include: insurance company corporate PR
personnel, PR agency reps, insurance media reporters, journalists and
free-lance writers, advertising managers, branding mangers, marketing
managers, and company principals who do much of their own media work.
www.insurancemedia.net.
In
2005 all services were brought under the Insurance Broadcasting brand.
InsuranceBroadcasting.Com defines itself as a next generation media
organization facilitating the exchange of information between insurance
industry professionals utilizing the improvements available from
emerging technology to deliver meaningful information.
www.insurancebroadcasting.com |
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6.
A.M. Best Comments on
Securities and Exchange Commission’s Proposal to Regulate Indexed
Annuities as Securities |
|
OLDWICK, N.J.--(BUSINESS WIRE)--At its open meeting on June 25, 2008,
the Securities and Exchange Commission (SEC) outlined a proposed rule
that would change the interpretation of the exclusion for annuities
under the Securities Act of 1933 and require the registration of
newly-issued indexed annuities as securities. The motivation for the new
rule appears to be driven in part by ongoing concerns over abusive sales
practices, as well as inadequate disclosure. Such a change would result
in a clear mandate for the Financial Industry Regulatory Authority (FINRA)
to supervise indexed annuities and those who sell them. Should this
proposed rule change be formally adopted, the implication for some
indexed annuity writers could be significant, as the lion’s share of
current indexed annuity sales are through independent marketing
organizations (IMOs)—many of whom utilize agents who are not registered
representatives.
As
currently proposed, the final rule would take effect 12 months after
publication in the Federal Register. Given the time necessary to collect
and digest public comments, initial estimates suggest that the effective
date of implementation is unlikely to be earlier than the beginning of
calendar year 2010. Additionally, A.M. Best notes that both the timing
and content of the final rule could be materially influenced by the
lobbying and legal efforts of various industry constituents including
industry organizations, independent marketing organizations, indexed
annuity writers and insurance industry regulators.
At
present, A.M. Best does not anticipate any immediate rating actions
resulting directly from the SEC’s proposed rule change. Given that the
initial proposal would not impact business written prior to
implementation, the near-term impact on the financial statements of
indexed annuity writers is likely to be de minimus. Furthermore, even if
it were ultimately to be implemented in its current form, companies
currently writing significant amounts of indexed annuity business would
have a substantial amount of lead time to prepare and reposition their
business models. However, A.M. Best notes that since IMOs are the
dominant form of distribution for indexed annuities industry-wide, it
may not be practical or cost effective for indexed annuity writers to
get enough of their agents registered in order to maintain sales at
current levels.
Nevertheless, despite expectations that the SEC’s proposal is unlikely
to have a material impact on indexed annuity writers over the short-
term, A.M. Best’s longer-term view is more guarded—particularly for
those companies heavily committed to this business. A.M. Best will
continue to monitor the progress of the SEC’s proposal, as well as the
development of strategic initiatives by insurers with a heavy sales
concentration in indexed annuities targeted at mitigating the impact of
the potential rule change on new business.
www.ambest.com |
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7.
Zurich to buy Sabadell insurance for up to $1.4 bln |
|
By
Sam Cage
ZURICH, July 11 (Reuters) - Zurich Financial Services (ZURN.VX: ) will
buy the insurance business of Bancao Sabadell (SABE.MC: ) for up to 900
million euros ($1.42 billion), it said, strengthening its foothold in
bancassurance.
The news comes just a day after Zurich pulled out of the auction for
Royal Bank of Scotland's (RBS.L: ) insurance business, in which it had
been considered the frontrunner, a decision that helped boost Zurich
shares some 7 percent on Friday [ID:nL10428710].
"We have always said we wanted to increase our market position in this
important market," Zurich Chief Executive Officer James Schiro said in a
statement.
The acquisition is the Swiss insurer's largest since Schiro started
slashing non-core assets and cutting costs from 2002, a period in which
analysts often criticised his cautious stance on buying rivals.
The Swiss insurer will take 50 percent stakes and have management
control of the jointly owned life insurance, pension and general
insurance operations of Spain's Banco Sabadell, which will continue to
hold the other 50 percent.
Markets welcomed Zurich's decision not to puruse RBS's insurance unit,
announced after the close on Thursday, sending its stock up 7 percent to
269 Swiss francs, while Sabadell traded flat.
"The very big news of the day is the withdrawal from the RBS deal," said
Landsbanki Kepler analyst Fabrizio Croce. "As the stock was heavily
under pressure recently due to this transaction, we expect a logical
rebound for the next few days reflecting the high rationality of ZFS
management."
Mario Greco, Zurich's newly appointed life insurance head, said in May
that bancassurance -- where an insurer uses a bank's branch network to
sell policies -- was one of the areas the company would look to acquire
to boost growth.
Zurich will pay 650 million euros plus an extra payment of up to
120 million, linked to future performance, for Sabadell's life insurance
and pension companies, it said.
It
will pay a further 100 million euros plus a potential extra 30 million
for half of the general insurance unit.
A
raft of Spanish banks and cajas, or savings banks, have sold part of
their insurance business over the last few years, bringing in the
expertise of major insurers like Zurich Financial and Mapfre (MAP.MC: ).
(Additional reporting by Douwe Miedema in London) (Editing by David
Cowell)
©
Thomson Reuters 2008 All rights reserved |
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8.
Insurance Commissioner
Poizner Announces Former Agent Jailed, Ordered To Pay $650,000 In
Restitution For Stealing From Clients
|
|
NORTHRIDGE - Insurance Commissioner Poizner today announced the
sentencing of a former agent for stealing more than a half of a million
dollars in insurance premium payments from his clients. Basilio
Vizmonte Reyes Jr., 48, of Northridge, was sentenced to seven years in
state prison and ordered to pay $646,458 in restitution to his victims.
"I
simply will not tolerate scam artists who prey on California businesses
and consumers," said Commissioner Poizner. "Thanks to the hard work of
Department of Insurance investigators, this fraud perpetrator is behind
bars, where he belongs. I urge anyone who suspects fraud to call the
Department of Insurance at 800-927-HELP."
An
investigation by the California Department of Insurance Investigation
Division revealed that during a four year period from 2002 to 2006,
Reyes sold phony commercial liability and workers compensation policies
to small businesses, including a number of nursing and assisted living
facilities. In failing to remit the premium payments issued to him,
Reyes not only stole from his clients, but also exposed them to the
danger of potential uninsured losses.
This case was prosecuted by the Los Angeles County District Attorney's
Office.
Following a recent meeting with his Advisory Task Force on Insurance
Fraud, Blue Ribbon Review Committee, Commissioner Poizner announced the
implementation of five actions to help reduce fraudulent claims,
including the creation of a fusion center for insurance fraud
investigations so law enforcement can share information more efficiently
and quickly to identify emerging trends and crime patterns.
Additional steps include:
Better training for the Special Investigation units on the recognition,
documentation, and reporting of suspected insurance fraud claims.
Recognizing insurance companies that go beyond compliance for their
greater commitment to fighting fraud.
Increasing the outreach efforts of CDI about the consequences of fraud,
how the public can recognize it and report it.
Adopting more aggressive recruiting and retention practices, including
pay upgrades, so that CDI can recruit and retain qualified
investigators.
The Task Force was created by Commissioner Poizner to bring together
public and private sector experts to develop innovative methods to
combat insurance fraud. The inaugural Task Force meeting was held in May
2007.
A
copy of the report can be found at
www.insurance.ca.gov. |
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9.
Government Mulls Fannie
Mae, Freddie Mac Takeover: Report |
|
By
Kevin Plumberg
HONG KONG (Reuters) - The U.S. government is considering taking over
Fannie Mae and Freddie Mac if their funding problems worsen, the New
York Times said on Friday, causing shares of the mortgage finance
companies to plunge.
Shares of Fannie fell 27 percent to $9.66 in pre-market trading, while
shares of Freddie fell 35 percent to $5.18. Both have tumbled by well
over 80 percent since August.
Fannie and Freddie are government-sponsored entities generally viewed as
having the implicit backing of Washington, and considered the last
bastions of support for a U.S. housing market in its worst downturn
since the Great Depression.
They have been under fire this week as investors questioned the
companies' ability to raise enough capital to stay afloat.
The New York Times said the government is considering a plan that would
place the companies into conservatorship, citing people briefed about
the plan.
This would mean the shares would be worth little or nothing, and the
losses on home loans they own or guarantee -- half of all U.S. mortgages
-- would be paid by taxpayers.
Officials involved in the discussions said no action by the
administration is imminent, and that Fannie and Freddie were not
considered in crisis, the newspaper said.
A
spokesman for Freddie Mac declined to comment. Fannie Mae and U.S.
officials could not be reached for comment.
European bond fund specialists said the government could not allow the
failure of the two housing market pillars.
"In a nutshell, they are simply too big," said Phil Barleggs, Insight
Investment's head of fixed product management. "There will be a lot of
political pressure to bail them out."
The fate of Fannie and Freddie has ramifications far beyond the United
States.
U.S. agency debt and agency-issued mortgage bonds held by foreign
central banks swelled by $9 billion in the last week to a record $978.98
billion, up 18 percent so far this year.
The European Central Bank accepts Fannie and Freddie loans as collateral
from commercial banks. It declined to comment on whether a possible U.S.
government move would affect its collateral framework, although a
spokesman said framework rules depended heavily on debt agency ratings.
The dollar initially gained on the report, government bonds fell and
stock markets climbed as investors felt a sense of relief, having
fretted about the fate of the mortgage lenders. That optimism was
misplaced, analysts said.
"If the situation is that serious, the U.S. stock market is likely to
fall further on risk aversion and on concerns of a massive new share
issue to capitalize the mortgage firms," said Hideki Hayashi, chief
economist at Shinko Securities in Tokyo. "The expected volatility in the
stock market should result in a weaker dollar."
NO
LONG-TERM CURE
A
government rescue would mark the second time that Washington has stepped
in to support the financial system since mounting U.S. subprime mortgage
defaults swelled into a global credit crisis a year ago.
In
March, the Federal Reserve backed a plan for JPMorgan Chase & Co to buy
investment bank Bear Stearns Cos for a cut-rate price.
Bondholders have obligations that would theoretically have priority in
any insolvency. However, the quasi-governmental status of Fannie and
Freddie complicates matters.
"Based on the previous experience with Bear Stearns and JPMorgan,
bondholders seem to be rewarded and shareholders are significantly
penalized," said Jimmy Koh, a Treasury economist with United Overseas
Bank in Singapore.
"But this is a little more dicey because we're not dealing with a bank,
we're dealing with an agency," he continued. "If there is something
seriously wrong, I really don't know what happens. We've never seen
anything like this before."
News the government was considering direct action to save the companies
boosted Asian, and initially European, stock markets. The dollar edged
up against the yen having fallen all week in tandem with shares.
"Any drastic move like that will only provide some short-term relief and
won't be a long-term cure," said Albert Hung, chief investment officer
at Alleron Investment Management in Sydney.
The Bush administration had considered calling for legislation to give
an explicit government guarantee on the $5 trillion of debt owned or
guaranteed by the companies, the Times said. That was seen as a less
attractive option because it would effectively double the size of the
national debt.
Even before this week, the stock prices of the two government-sponsored
mortgage finance companies have been pummeled this year after soaring
delinquencies on home loans resulted in billions of dollars of losses.
This has spawned speculation about whether they can withstand more
losses and need massive new capital to survive.
(Additional reporting by Parvathy Ullatil in Hong Kong, Geraldine Chua
in Sydney, Eric Burroughs in Tokyo, Gerrard Raven in London and Jonathan
Stempel in New York; Editing by Ruth Pitchford and Steve Orlofsky)
©
Thomson Reuters 2008 All rights reserved |
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10.
Citigroup To Sell
German Unit For About $8 Billion |
|
By
John O'Donnell and Jonathan Stempel
FRANKFURT/NEW YORK (Reuters) - Citigroup Inc (C.N: ), the largest U.S.
bank, said on Friday that it was selling its German consumer banking
unit to France's Credit Mutuel Group for close to $8 billion to shore up
capital.
Credit Mutuel will pay 4.9 billion euros ($7.8 billion) in cash plus the
German unit's earnings accrued in 2008 through the closing, which is
expected in the fourth quarter.
The sale is part of Citigroup Chief Executive Vikram Pandit's plan to
dispose of $400 billion of assets after losses piled up from subprime
mortgages and other risky debt.
Citigroup has suffered more than $46 billion of credit losses and
write-downs since the middle of 2007. It is expected next Friday to post
its third straight quarterly loss, after losing close to $15 billion in
the prior two quarters.
"Pandit
is trying to get rid of noncore assets, and the sale serves his purpose
of raising needed capital," said Chris Hagedorn, who helps invest $21.4
billion at Fifth Third Asset Management in Cincinnati, including in
Citigroup stock. "It's a multiyear objective, and there's still a lot to
be done."
The German consumer business, known as Citibank, has a market share of
nearly 7 percent. Its 6,800 employees serve about 3.25 million customers
and operate 340 branches.
It
made its money by lending for everything from televisions to cars, and
also has a credit card business and an arm that provides investment
advice to wealthy customers. The unit had net income of 365 million
euros in 2007, down 16 percent from the previous year. Citigroup's roots
in Germany go back to 1926.
"This is another strategic step in our effort to reorganize Citi,
strengthen our balance sheet, and put us squarely on the path to future
growth," Pandit said in a statement.
Shares of Citigroup closed Thursday at $16.28. They began the year at
$29.44.
(1
euro = US $1.585)
(Additional reporting by Sudip Kargupta in Paris and Mathieu Robbins in
London; Editing by David Cowell, Erica Billingham and Lisa Von Ahn)
©
Thomson Reuters 2008 All rights reserved |
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11.
Sandwich Board Is New
Tool In Wall Street Job Search |
 |
Joshua Persky stands with his sandwich board
advertisement in New York, July 10, 2008. Out of work for six months and
desperate to find a job, one innovative New Yorker donned his new power
suit -- a sandwich board -- and hit the streets of Manhattan to lure
potential employers. REUTERS/Shannon Stapleton
|
By
Nancy Leinfuss
NEW YORK (Reuters) - Out of work for six months and desperate to find
a job, one innovative New Yorker donned his new power suit -- a sandwich
board -- and hit the streets of Manhattan to lure potential employers.
"Experienced MIT Grad For Hire!" read 48-year-old Joshua Persky's
advertisement as he paraded around midtown Manhattan, a key location for
commercial banks and investment houses.
He
was also just blocks away from where he worked for two years as a
valuations consultant for Houlihan Lokey, a mid-cap investment bank,
before he was laid off.
"I
chose that area because that's where the money is. There is always
people strolling outside around lunch time. I've handed out a lot of
resumes and gotten some leads but no offers yet," said Persky.
The job seeker has encountered many well wishers, and offers of
potential jobs across the country and the world, but nothing concrete in
New York yet.
"Yesterday, I received a phone call from a recruiter in Singapore, who
was looking for a quantitative hedging specialist for its Tokyo office.
I've also been contacted by a hedge fund in Boca Raton, whose looking
for someone to value derivatives," he said.
He
recently interviewed with a hedge fund and investment bank but said
competition is fierce given the rising tide of unemployment in the
financial industry.
"Big commercial and investment banks are laying off all kinds of people.
It started back with the subprime mess and the situation has gotten
worse and worse," said Persky.
Two weeks ago he was forced to leave his Upper East Side Manahattan
apartment and move in with a friend, while his wife and two children
have temporarily relocated to Omaha, Nebraska to stay with family.
(Reporting by Nancy Leinfuss; Editing by Michelle Nichols)
©
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12.
NYS Improves Oversight
Of $3 Bln Liquidation Bureau |
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NEW YORK, July 10 (Reuters) - New York State has tightened controls on
its Liquidation Bureau, which manages $3 billion of assets, after
overseeing the first top-to-bottom audit in its 99-year history, the
state insurance superintendent said Thursday.
The bureau handles the liquidation or rehabilitation of more than 60
insolvent or impaired insurance company estates and conservations.
Last year, consultants were hired to delve into the workings of the
bureau, which ensures policy-holders are paid when insurance companies
run into trouble.
"The bureau's new leadership was conducting an internal investigation
that showed past overbilling by outside vendors and consultants, and
other considerable operational failures," Insurance Superintendent Eric
Dinallo said in statement.
Checking 40 files of law firm bills uncovered $250,000 of over- or
duplicate charges that have now been recovered, Mark Peters, who runs
the bureau, told Reuters.
While it would cost too much to go back through 20 years of bills, the
bureau is examining 300 more files. By hiring in-house lawyers, it
should be able to save "millions of dollars" of legal fees in the next
several years, he added.
The audit also found a bankrupt public motor vehicle fund was owed $20
million held by an insurance company, Peters said. Recovering that cash
enabled the bureau to clear up nearly a decade-old backlog of claims.
Thursday's report by consultants Amper, Politziner and Mattia, P.C.
found that the personal information of claimants and policy-holders was
not secure due to "outdated" systems.
"Confidential information is no longer in jeopardy. Those are the kinds
of things we fixed immediately," Peters said.
The first of a three-part analysis can be found on the web site:
www.nylb.org.
The second report, due shortly, should have the complete reconciliations
and reveal the bureau's finances and the "fiscal position" of its
estates as of Dec. 31, 2006, Dinallo said.
Other problems the first review uncovered included an over-reliance on
outside consultants without sufficient oversight or back-up procedures.
The third analysis, the 2007 financials, will be issued in the fall of
2008. (Reporting by Joan Gralla; Editing by Dan Grebler)
©
Thomson Reuters 2008 All rights reserved |
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13.
AAIS Files Revised Loss
Costs Under Commercial Crime Program |
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Wheaton, Ill., July 10, 2008-Property/casualty insurers will soon have
access to updated rating information for commercial crime insurance.
The American Association of Insurance Services (AAIS) has filed
revised loss costs under its Commercial Crime Program in most states. To
date, 21 states have approved the filing, with an effective date of Jan.
1, 2009.
AAIS is a former rating bureau that develops policy forms and rating
information for 23 programs of personal, commercial, agricultural, and
inland marine insurance. AAIS programs are used by more than 600
property/casualty insurers throughout the U.S.
AAIS is also a licensed statistical agent that collects premium and
loss data for all lines of insurance for which it supports a program,
plus personal auto. In most states, changes to the Commercial Crime loss
costs reflect indications based on AAIS statistical data and, for
certain coverages, crime experience data collected and published by the
Federal Bureau of Investigation.
The federal crime data was utilized to calculate average incidence of
property crime per 1,000 persons in each state and the District of
Columbia, and to determine the relativity of each state's incidence of
property crime to the national average. The rate level adjustments in
this filing reflect such relativity, as well as recent years' premium
and loss experience, and related cost index changes.
The AAIS Commercial Crime Program provides forms, endorsements,
manual rules, and rating information for providing nine different types
of commercial crime coverage: burglary/robbery, computer fraud,
counterfeit money/money orders/travelers checks, employee dishonesty,
forgery, forgery--personal accounts, money/securities, premises
liability for guests' property, and theft.
http://www.aaisonline.com
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14.
AIA Agrees With State
Insurance Legislators’ Approach To Credit-Based Insurance Scores And
Protecting Confidential Information |
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WASHINGTON, D.C., JULY 10, 2008 – The American Insurance Association (AIA)
will be focused on issues concerning insurers’ use of credit
information, state natural catastrophe funds and protection of
confidential insurer data during the summer meeting of the National
Conference of Insurance Legislators (NCOIL) July 10-13 in New York.
NCOIL will consider a resolution supporting state regulation of the use
of credit information in personal lines, noting that 26 states have
adopted NCOIL’s insurance scoring model act in some form.
“NCOIL’s model has been a reasonable approach to regulating insurers’
use of credit information,” said Raymond Farmer, AIA assistant vice
president, Southeast Region.
“Consumers are protected, and insurers are allowed to use a tool that
has proven to be valuable in accurately underwriting personal lines. The
result is a majority of consumers benefit from the use of credit-based
insurance scores." www.aiadc.org |
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15.
Brokers Can Now Offer
Clients International Services |
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Brokers can now offer clients looking to open offices overseas
European-based employee benefits services that will help them establish
their operations through a partnership between Zywave and Chuchills
Consulting International.
Milwaukee, WI, July 10, 2008. Zywave, a leading technology provider of
products and services for insurance brokers, is partnering with
Churchills International Consulting Limited, a United Kingdom-based
developer of online employee benefits solutions.
The alliance will give Zywave brokers access to Churchills’
comprehensive list of products and services, including Human Resources
Services, Flexible Benefits, Employee Benefits, International Benefits
Network, Key Executive Assurance, Corporate Insurance and Eurolaunch, a
program that manages the infrastructure needs of United States and
Canadian companies that establish operations in Europe.
“Setting up shop in a foreign country can be very challenging, but with
Churchills performing the administrative legwork, companies can more
quickly become established, allowing them to concentrate on generating
revenue and building their business,” says Dave O’Brien, Executive Vice
President and Chief Marketing Officer of Zywave.
The Eurolaunch program offers corporate Technical Services to assist in
the formation of a company, Finance and Administration advice, Legal
Services, Business Insurance, HR Support, Personnel Recruitment,
Employee Benefits Insurance and Marketing Services.
"Eurolaunch
allows companies to hit the ground running and significantly accelerates
their time to market, in some cases by as much as 12 months," says
Peter Meagher, CEO of Churchills Consulting. http://www.zywave.com
www.churchillsconsulting.com |
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16.
MIB Life Index Reports
North American Life Insurance Activity Flat in June |
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Braintree, MA. – (July 9, 2008) North American application activity for
individually underwritten life insurance was off slightly in June, down
-0.9% year-over-year, according to the MIB Life Index ?. Second quarter
activity trailed that of Q2 2007 by -2.5%. Year-to-date (YTD) life
insurance application activity has declined -1.9%, compared to the same
period last year.
U.S. application activity was off -0.9% in June year-over-year, all ages
combined. Second quarter activity trailed that of Q2 2007 by -2.9% with
quarterly declines principally attributed to lost ground in the 0-44 and
45-59 age groups, down -4.4% and -2.5% respectively. Ages 60+ showed a
quarterly increase of +4.2%, Q2 2008 over Q2 2007. June’s activity by
age group followed suit: ages 0-44 and 45-59 off -2.3% and -0.5%
year-over-year, respectively with a +5.1% jump, ages 60+. YTD, U.S.
application activity is off -2.5% versus the same six months 2007. www.mib.com/lifeindexUH.
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17.
Benfield Releases
ExposureView™ Upgrade |
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State of the art mapping technology empowers insurers to dynamically
interact with their portfolios during hurricane season
MINNEAPOLIS – Benfield, the world’s leading independent reinsurance and
risk intermediary, today released Version 3.1 of ExposureView, the
latest upgrade of the company’s award-winning risk mapping and exposure
management tool.
“Our continued commitment to innovation has led us to this new version,”
said Kevin Campion, Executive Vice President and head of the US Benfield
ReMetrics team that developed the software. “With over 1,000 users,
Version 3.1 is easier to use and more powerful with interactive
reporting capabilities that help our clients respond quickly during the
hurricane season.”
ExposureView enables insurers to visualize the potential impact of
catastrophic events on their portfolios, before, during, or after the
event. Claims teams use it for deploying adjusters, and managing and
analyzing claims. Underwriters use the application to review new risks
relative to accumulations in their existing portfolio and against local
perils such as terrorism targets.
ExposureView 3.1 enhancements include a new feature called ExposureCube
that allows users to dynamically interact with their data to build and
deliver reports instantaneously. Designed with a user friendly
interface, functionality includes summarizing, filtering, drill-down,
roll-up, and standard pivot table features to enable users to quickly
create all possible reports from one dataset.
Other enhancements include a menu of commonly used reports, improved
analysis for tornadoes and hail storms, and automated hurricane
footprints updated every six hours. With ExposureView 3.1, clients are
now able to upload new exposure datasets at any time, allowing them to
use the latest information as they plan their response.
ExposureView 3.1 can be used with a wide range of data including
personal or commercial property, auto, workers compensation, offshore
platforms—any data that has a full address or a specific
latitude/longitude.
Fast deployment, zero administration, unlimited scalability, and no
software installation, ExposureView 3.1 is readily accessible with a web
browser and an internet connection.
www.benfieldgroup.com |
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18.
New York Life Foundation Grants $450,000 To The National Academy
Foundation
|
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Three-Year Grant Supports Academies of Finance Within Public High
Schools
NEW YORK, N.Y., July 10, 2008 – The National Academy Foundation (NAF)
announced today that it has received a three-year, $450,000 grant from
the New York Life Foundation to support curriculum enhancements,
professional development, and technical assistance in six new and 15
existing Academies of Finance (AOF), or “schools within schools,” in
public high schools in Dallas, Miami, Seattle, Detroit and Tampa.
www.naf.org |
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19.
Philadelphia Insurance
Companies Announces New Adoption Agencies Product |
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Bala Cynwyd, PA, July 10, 2008, Philadelphia Insurance Companies
(NASDAQ: PHLY) is proud to introduce its new Adoption Agencies product.
Providing one of the broadest coverage forms in the market, PHLY’s new
Adoption Agencies product offers comprehensive coverage for General
Liability, Professional Liability, Property, Inland Marine, Crime, Abuse
and Automobile.
Acceptable classes include Hague accredited agencies handling both
domestic and international adoptions. Adoption exposures written in
conjunction with otherwise acceptable social service operations are also
eligible. www.phly.com |
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20.
INSURANCE NEWSCAST "Pictures Of The Day"
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Fans hold Madonna photos as New York Yankees' Alex
Rodriguez (L) waits to bat against the Toronto Blue Jays during the
third inning of their MLB American League baseball game in Toronto July
11, 2008. REUTERS/ Mike Cassese (CANADA) |
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Storm watch issued as hurricane nears Bermuda.
Hurricane Bertha is pictured over the Atlantic Ocean in this NASA
satellite image taken July 7, 2008. Strengthening far more swiftly and
vigorously than predicted, Hurricane Bertha became a "major" hurricane
in the open Atlantic on July 7, with sustained winds of at least 115
miles per hour (185 kph), U.S. forecasters said. REUTERS/NASA/Handout
Read Entire Story!!!
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Liberia's President Ellen Johnson Sirleaf meets
South Africa's former President Nelson Mandela in Johannesburg July 11,
2008. Johnson Sirleaf is in the country to give the Sixth Annual Nelson
Mandela lecture and take part in celebrations marking Mandela's 90th
birthday. REUTERS/Juda Ngwenya/Handout (SOUTH AFRICA)
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Thousands evacuated in California and Washington
fires. A firefighter works to control a backfire set during a massive
wildfire in Big Sur, California July 6, 2008. Fire crews have
successfully defended the village of Big Sur but have been able to
contain only 5 percent of Basin Complex blaze, which has destroyed about
20 homes. REUTERS/Robert Galbraith (UNITED STATES)
Read Entire Story!!!
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Russia and China veto U.N. Zimbabwe sanctions.
Zimbabwe President Robert Mugabe listens to speeches at the African
Union summit in the Egyptian resort of Sharm el-Sheikh, Egypt, in this
file photo from June 30, 2008. A U.N. resolution to impose sanctions on
Zimbabwe for holding a violent June 27 presidential poll boycotted by
the opposition candidate was vetoed in the Security Council on Friday by
Russia and China. REUTERS/Asmaa Waguih (EGYPT)
Read Entire Story!!!
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The first buyer of the new 3G iPhone in Hong Kong
shows off his phone July 11, 2008. The new iPhone is expected to attract
hordes of buyers when it goes on sale on Friday in more than 20
countries and regions, helping Apple Inc handily beat its target to sell
10 million of them by the end of 2008. REUTERS/Bobby Yip
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Oscar buzz mounts for late Heath Ledger. Heath
Ledger stars as The Joker in the action drama “The Dark Knight.”
REUTERS/Warner Bros./Handout
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A heifer jumps over revellers at the end of the
fourth running of the bulls of the San Fermin festival in Pamplona July
10, 2008. REUTERS/Joseba Etxaburu
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Crown Prince Willem Alexander and Argentine-born
Princess Maxima of the Netherlands pose with their daughters Ariane (L),
Catharina-Amalia (C) and Alexia during a photo call at the gardens of
"de Horsten" in Wassenaar July 11, 2008. REUTERS/Robin van Lonkhuijsen/United
Photos (NETHERLANDS)
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Young giant pandas eat a meal of bamboo inside
their enclosure at Beijing Zoo July 10, 2008. Eight giant pandas are
part of a special exhibit at the zoo for the upcoming Beijing 2008
Olympic Games. REUTERS/Darren Whiteside (CHINA)
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