Daily Quote: “It is certain that either wise bearing or ignorantcarriage is caught, as men take diseases, one of another; therefore let men take heed of their company." -- Shakespeare
1. INSURANCE NEWSCAST “White Papers” Twinsburg, OH – 06/21/06 – The growth of INSURANCE NEWSCAST has been a story that is now almost 8 years in the making. Currently the subscriber list is approximately 350,000 of the best and the brightest people in the insurance industry. The mission has been to provide a single source for news and subjects that are being published related to the insurance industry that is free, valuable, and easy to use. The format of the newsletter has evolved over time including the option to link to the entire story or press release. That modification created the structure to include considerably more content, some of which had previously been included in our “Wednesday White Papers” segment. Not all the content we received, however, fell within our layout guidelines. This was particularly true of PDF files. Effective today, we are going to restore a “White Paper” segment in our newsletter each day, and we are pleased to bring you an outstanding article written by John Penko, SVP of Sales for AIG Employee Benefit SolutionsSM.
People –
Process – Product: Navigating the Worksite Market A white paper crosses over that edge between a news story, and a more detailed and lengthy piece. A white paper could be considered similar to a magazine article, executive summary, special report, survey results, etc. We do not charge to publish white papers in our newsletter, nor do we charge to publish any other news content in our newsletter for that matter. Our press release and white paper submission process can be viewed at our website; www.insurancebroadcasting.com, and we welcome submissions for potential publication. We strive each day to bring you the best newsletter in the insurance industry without any costs of any kind, whatsoever. We strive to be inclusive, innovative and engaging so you are compelled to want to read our newsletter rather than one of our competitors. We have some additional improvements on the way to win your interest and improve the usefulness of the newsletter to the highest possible level. We appreciate your involvement and are eager to read any comments or ideas you might have. (Send to wpodgurski@aol.com) Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Southern San Andreas fault waiting to explode: report
A sudden lateral movement of 7 to 10 metres would be among the largest ever recorded. According to the U.S. Geological Survey (USGS), the earthquake that destroyed San Francisco in 1906 was produced by a sudden movement of the northern end of the fault of up to 21 ft. Fialko said there had been no recorded movement at the southern end of the fault -- the 800-mile long geological meeting point of the Pacific and the North American tectonic plates -- since the dawn of European settlement in the area. He said this lack of movement for 250 years correlated with the predicted gaps between major earthquakes at the southern end of the fault of between 200 and 300 years. Elsewhere on the fault, there were average slippage rates up to a couple of centimeters a year that prevented the build-up of explosive pressure deep underground. When these became blocked and then suddenly broke free they produced tremors or earthquakes of varying intensity depending on the movement that had taken place before and the duration of the blockage. USGS says the most recent major earthquakes in the northern and central zones of the San Andreas fault were in 1857 and 1906. Fialko said there were three possible explanations for the lack of observed movement in the southern section -- creepage under the surface that had no external manifestation, that it simply might not move as much as the rest or a major blockage. "Except for the first possibility above, the continued quiescence increases the likelihood of a future event," he wrote. Making calculations based on a wide range of land and satellite observations, he discounted the idea of creepage and warned of impending disaster. "Regardless of fault geometry and mechanical properties of the ambient crust, results presented in this study lend support to intermediate-term forecasts of a high probability of major earthquakes on the southern SAF system," Fialko said. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Mitsui Sumitomo Insurance hit with suspension order By Jonathan Soble - TOKYO, June 21 (Reuters) - Japan's financial regulator imposed a slate of business suspensions on Mitsui Sumitomo Insurance Co. Ltd. (8752.T:) on Wednesday, after the firm failed to pay thousands of auto and health insurance claims. The Financial Services Agency (FSA) banned Mitsui Sumitomo, Japan's second-biggest casualty insurer by market value, from selling all kinds of insurance for two weeks beginning on July 10, and from selling health insurance indefinitely until it showed it had fixed its compliance problems. The agency also barred the firm from applying for new product licences for up to a year and from establishing new overseas units for three months, both starting on June 22. Mitsui Sumitomo was one of about two dozen insurers that admitted last year to failing to pay a combined 8.4 billion yen ($73.4 million) in benefits due to policy-holders. The firm reported then that it had failed to pay about 27,000 legitimate claims during a three-year period, but a subsequent inspection by the FSA uncovered roughly 18,000 additional non-payment cases worth 885 million yen, the agency said. "Paying claims is one of the basic functions of an insurance company. If it can't do that then something is fundamentally wrong," an FSA official told reporters. Last month the FSA banned rival Sompo Japan Insurance Inc. (8755.T:) from selling casualty insurance for two weeks for a series of violations, including failing to pay claims and padding its sales by paying premiums on behalf of clients. Mitsui Sumitomo drew harsher penalties because the number of unreported non-payment cases at the firm was more than 10 times that at Sompo. In some cases, Mitsui Sumitomo agents told customers who complained about the firm's refusal to pay that their premiums would rise if they they pressed their claims, the FSA said. "This was simply mis-information," the agency official said. Although health insurance makes up only a small part of Mitsui Sumitomo's business and accounted for less than 1,000 of the mew non-payement cases, the FSA's indefinite suspension of that operation represented an unusually harsh penalty. Mitsui Sumitomo apologised for the problems in a statement. "All our employees take the penalty seriously and are working diligently to prevent further incidents and restore faith in the company." The ban on establishing new overseas units arose from problems found at Mitsui Sumitomo's UK subsidiary. An unnamed director of the unit paid consulting fees to outside firms without proper contracts or authorisation from the board, creating "the potential for embezzlement", the FSA said. Mitsui Sumitomo can shorten its one-year suspension from new-product development by up to six months if it can show that it has cleaned up its business, the FSA said. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Equifax says laptop with employee data was stolen Wed Jun 21, 2006 1:03am ET - By Jonathan Stempel - NEW YORK (Reuters) - Equifax Inc. (EFX.N:), one of the three major U.S. credit reporting bureaus, on Tuesday said a laptop computer containing employee names and Social Security numbers was stolen from a worker traveling on a train near London. The May 29 theft affects nearly all of the Atlanta-based company's nearly 2,500 U.S. employees, aside from those hired in roughly the last two months, spokesman David Rubinger said. Personal data of millions of consumers who obtain credit scores from Equifax were not compromised, Rubinger said. Equifax employs about 4,600 people worldwide. The data theft is the latest of many, potentially affecting tens of millions of people. Rubinger said British authorities were investigating the matter. According to Equifax, the laptop contained names and partial or full Social Security numbers. Rubinger said it would be tough for anyone to decipher the data because it was streamed together. "It would be very difficult to link the information or determine that they were actually Social Security numbers in the first place," he said. Equifax said it disciplined the employee carrying the company laptop, but declined to name him or the punishment. Rubinger said the employee was authorized to have access to the data that was stolen, "but was not allowed to store it on his laptop as he did." Equifax said it notified employees about the theft on June 7, and encouraged them to put fraud alerts on their credit files. It is also providing free credit monitoring. Lenders use credit scores to gauge consumers' eligibility for credit cards, mortgages, auto loans and other borrowings. Equifax's main competitors in this area are Experian, a unit of Britain's GUS Plc (GUS.L:), and TransUnion LLC. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Consumer Groups and Medical Malpractice Survivors Form United Front Against 'Health Courts' WASHINGTON, June 21 /U.S. Newswire/ -- In two separate letters to the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee, four of the nation's leading consumer groups and 40 victims of medical malpractice expressed strong objection to the concept of "Health Courts" to resolve medical malpractice claims. The HELP Committee is holding hearings on June 22 to examine several medical malpractice issues, including the fairness of using specialized Health Courts to replace judges and juries in medical malpractice cases. According to the letter from consumer groups Alliance for Justice, Center for Justice & Democracy, Public Citizen and USAction, the options being considered by the HELP committee would eliminate the right to jury trial, replacing it with "a vaguely defined administrative bureaucracy run by political appointees charged with developing uniform schedules of compensation for specific medical injuries." Experience with similar systems "strongly suggests that they will provide worse protection for patients than the civil justice system currently provides," said the groups. Copies of the letters can be found at: Consumer group letter: http://www.afj.org/health.courts.letter6-20-06.pdf Medical Malpractice survivors' letter: http://www.centerjd.org/press/release/HealthCourtsLetter.pdf http://www.usnewswire.com/ © 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 6. Nation's Insurance Commissioners Help Consumers Cope With Cost, Confusion Regarding Health Insurance KANSAS CITY, Mo., June 21 /PRNewswire/ -- Health insurance -- critical to the peace of mind of most Americans -- has become increasingly complex and expensive, according to The National Association of Insurance Commissioners (NAIC). A maze of options and cost considerations -- from Health Maintenance Organizations to Health Savings Accounts -- now confront consumers. To help individuals clear up the confusion and gain a better understanding of the costs of their coverage, the NAIC has assembled useful information about health insurance -- all organized by life stage needs -- on a new consumer education web site called Insure U (http://www.InsureUonline.org). "The better consumers understand their health insurance options, as well as their share of the costs for premiums, co-pays and deductibles, the better they'll be able to plan for health related expenses," said Alessandro A. Iuppa, NAIC president and Superintendent of the Maine Bureau of Insurance. "We've created Insure U to help educate consumers about insurance." Recent research conducted by the NAIC indicates that cost and confusion regarding health insurance are significant issues for consumers across all life stages, even for those with access to health insurance through their employers or government programs like Medicare. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. NAIC TELLS SENATE COMMITTEE THAT MCCARRAN EXEMPTION FOSTERS COMPETITION Teamed With State Supervision, Antitrust Exemption Benefits Consumers, Ensures Vibrant Insurance Marketplace KANSAS CITY, MO (June 20, 2006) – Speaking on behalf of the National Association of Insurance Commissioners (NAIC), Illinois Director of Insurance Michael McRaith told the U.S. Senate Committee on the Judiciary today that the McCarran-Ferguson antitrust exemption, in concert with effective state insurance supervision, fosters a vibrant, competitive insurance marketplace, and cautioned against its repeal. "The ‘business of insurance’ exemption in McCarran-Ferguson authorizes insurers to engage in supervised, but cooperative, activities that promote competition, enhance consumer choice, and help maintain marketplace integrity," McRaith said to the Senate Committee. "Its repeal would not improve the affordability, reliability or availability of insurance to consumers, but rather inject uncertainty, reduce stability and predictability, deter capital infusions, and ultimately harm competition and raise costs." McRaith emphasized state insurance officials’ core priority of protecting consumers, and highlighted the unique characteristics of insurance, which make analogies to other financial sector products inherently misleading. Additionally, he shared insurance commissioners' concerns regarding recently introduced legislation to establish an untested, industry-funded federal insurance regulator and allow insurance companies to opt out of "cradle-to-grave" state consumer protection. "The creation of a massive new federal bureaucracy to benefit a small segment of the largest carriers in the insurance industry - at the expense of consumers - is an idea that this Committee and the U.S. Congress should unequivocally reject," McRaith said. The Director also shared with the Committee the extensive work of the NAIC Broker Activities Task Force, which he chairs, to address allegations of bid-rigging and other anti-competitive practices. McRaith showcased the NAIC’s three-pronged national plan of action: to promote broker compensation transparency, to coordinate multi-state investigations of brokers’ and insurers' business practices, and to ease the process of providing anonymous "tips" to alert insurance officials of unlawful or unscrupulous behavior. "NAIC members have worked on these issues with attorneys general from around the nation, and have guided resolutions that have returned more than $1 billion to policyholders and imposed business reforms that prioritize consumer protections," McRaith said. "The NAIC looks forward to continued work with federal and state officials, consumers, large and small industry participants, and other interested parties to prevent and punish anti-competitive practices.” www.naic.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Groupification of worksite products continues, according to a recent Eastbridge study on product trends AVON, Conn.--(BUSINESS WIRE)--June 21, 2006--These days there are often few distinctions between voluntary plans on a group versus individual platform. A recent study by Eastbridge Consulting Group on worksite product trends confirms this continued blurring between the lines. "As in past surveys, the characteristics used to distinguish one product form from another are disappearing as evidenced by the responses we received to several questions on the subject," comments Bonnie Brazzell, vice president of Eastbridge. "On the individual side of the worksite market, for instance, guaranteed issue underwriting is now readily available just like it has been for the group side." In fact, almost three-quarters of the respondents in the most recent Eastbridge Worksite Product Trends study agree that guaranteed issue is needed for a carrier to be competitive in the voluntary/worksite market. "We're also seeing a relaxing of minimum participation requirements," adds Gil Lowerre, Eastbridge president. In the current study, 75 percent of respondents agreed that low participation requirements (25 percent or less) are needed in the market today, up from 44 percent in an earlier study. In the past, individual plans had low or even no participation requirements while group plans tended to have relatively high requirements. "Another 'line blurring' change has been the increase in portable group products," explains Lowerre. Individual products, by nature, are portable while group plans (traditionally) terminate whenever the employees leaves the employer. "Today," says Lowerre, "most group carriers recognize the need to have portability in many of their group products." In the Eastbridge study, 65 percent of respondents agreed that portability is needed in voluntary products. Finally, over six in ten respondents feel that all voluntary carriers (even those with group platforms) must maintain records on individual employees. "We have seen a real shift in group carriers recognizing that it is their job (and not the employers) to maintain employee records," adds Brazzell. The 2006 Worksite Product Trends Frontline Report updates our 2002 and 2004 studies on the same topic. Where applicable, the current study draws comparisons between this year's results and those of the past two studies. Eastbridge Insight and Information Partner Companies as well as participants in the survey receive the Frontline Report free of charge. Eastbridge Consulting Group, Inc. is a marketing advisory firm serving insurance and financial services organizations in the United States and Canada. Contacts - Eastbridge Consulting Group, Inc. - Bonnie Brazzell, 860-676-9633 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. A.M. Best States Position on Sidecars OLDWICK, N.J.--(BUSINESS WIRE)--June 16, 2006--The tightening of reinsurance capacity in the property/casualty market has made the use of "sidecars" an attractive alternative to traditional retrocession. A sidecar is a limited-life special purpose entity that generally provides property catastrophe quota-share reinsurance exclusively to its sponsor. Of late, A.M. Best Co. has seen an increase in the use of sidecars as a way to offer rated debt to investors seeking exposure to various layers of catastrophic risks. In the past, A.M. Best has evaluated the capacity and general creditworthiness of sidecars to determine, in general, whether sidecars will strengthen, weaken, or have no effect on the financial strength ratings of the sponsoring reinsurers. The analyses focused on the structural integrity of the transactions and the analytical rigor applied by various experts and advisors, such as peril modelers and investment banks. However, A.M. Best will now go one step further to publish issuer credit ratings and/or debt ratings, where appropriate, on all sidecars and their corresponding debt (if any). www.ambest.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. Allstate Files $1.8 Million Medical Fraud Suit; Suspected Fraudsters Accused of False Billing and Unlicensed Treatments IRVING, Texas--(BUSINESS WIRE)--June 20, 2006--Allstate Insurance Company filed a lawsuit today against two individuals and a Dallas-based group of medical clinics, alleging fraudulent billing practices for hundreds of automobile collision insurance claims. The case was filed in the U.S. District Court in Dallas against Michael Mantas, M.D., Farshad Barkhordar, and seven companies involved in the operation of the clinics. The suit alleges the defendants fraudulently billed Allstate for unreasonable and unnecessary treatments and testing, and improperly billed for testing performed by unlicensed and unsupervised personnel. Named in the suit are Michael A. Mantas, M.D., P.A.; Red Apple, L.L.C.; Alcman Management, Ltd.; Alcman Corp.; Althkos, Inc.; Metroscan Imaging, L.L.C.; and Dallas Neurodiagnostic Associates, Inc.. The various defendants do business as "MedCentra," "Associated Medical Providers," "Metroscan Radiology," "Tenamed," and "Neurology Clinic." According to the complaint, the Defendants allegedly put patients involved in accidents through a standardized treatment plan at the clinics and routinely referred patients to co-owned facilities for unreasonable and medically unnecessary diagnostic tests. One such procedure, Nerve Conduction Velocity (NCV) studies, was allegedly conducted by defendant Barkhordar, who the suit claims is not a licensed healthcare provider in the State of Texas and is unqualified to conduct and evaluate such tests. The suit also alleges that medical reports falsely represent to have been dictated by licensed medical doctors, when they were generated by office personnel, making baseless assertions concerning the need for future medical care. In addition, the suit alleges Defendants often provided patients with "TENS," and other electrical stimulation devices. The quality and capabilities of these units were misrepresented by overcharging, often at twenty times the actual cost of the device. The lawsuit claims Defendants have submitted approximately $1.8 million dollars in billings to Allstate since January 2001, involving at least 557 claimants. The suit seeks reimbursement for the sums the defendants obtained from Allstate in the fraud scheme. "Industry experts say phony insurance claims take an extra $200-$300 out of every consumer's pocketbook annually in the form of higher premiums," said Edward J. Moran, Allstate assistant vice-president in charge of the company's Special Investigative Unit (SIU). "Allstate has no tolerance for this crime, and we will continue to fight insurance fraud on behalf of our policyholders and consumers in general." www.allstate.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. New MetLife Brand Ad Campaign Focuses on Financial Burden Shift for Consumers; MetLife Helps Consumers Create Their Own 'Personal Safety Net'... for the ``Ifs'' In Life NEW YORK--(BUSINESS WIRE)--June 21, 2006--MetLife today launched a new national brand advertising campaign to help consumers create a guaranteed "personal safety net" and take control of their financial future. The new campaign, entitled "if", speaks about both the possibilities and uncertainties consumers face throughout their lives - the ifs in life. The new brand platform is the result of MetLife's insights and significant consumer market research, which sheds light on evolving trends in consumer attitudes. First and foremost, individuals recognize they are shouldering more of the financial burden and can no longer count on the government, their employer or the stock market for their financial security. Consumers are also becoming increasingly conscious of the risks they face. They understand that the core of a smart financial plan isn't about returns or yields - rather, it's about ensuring that their families protect their financial future. At the same time, research shows there are huge gaps between financial goals and what consumers actually do to meet them. "MetLife is leading the insurance industry in acting on changing market forces," said C. Robert Henrikson, chairman of the board, president and chief executive officer of MetLife, Inc. "This campaign is not only about preparing for the unexpected - it's about planning for the expected. Consumers must understand that there are resources to ensure their financial security in lieu of the traditional guarantees our parents relied on - such as Social Security and pensions." "MetLife is keenly aware of a number of societal and market forces impacting the business and consumers' lives, and this strategy directly addresses the key one: the fact that individuals are shouldering more of the financial burden than ever before. In this new age of uncertainty, consumers can't invest away their financial risks; they must insure for them," added Henrikson. Highlighting that "if" is a part of life, as well as part of MetLife's brand name, the campaign touches on the key aspects of what consumers want today: guarantees, expert advice, a company they can depend on, and the confidence that will help them feel good about purchasing protection products. This emphasis on the MetLife name reinforces the value of the brand, which enjoys virtually 100 percent name recognition. "The new campaign speaks directly to MetLife's ability to help consumers create their own 'personal safety net' with guarantees to secure their future," said Beth Hirschhorn, MetLife's vice president, Global Brand and Marketing Services. "The campaign has been extensively tested with consumers and, as a result of viewing the new ads, favorability ratings of MetLife doubled." Throughout the company's history, one of the most valued assets of MetLife has been the strength of the brand name, which enjoys virtually 100 percent name recognition on an aided basis. The "if" commercial, designed to reach both men and women, will run on the major networks and cable, and print ads will appear in a number of major daily newspapers, news weeklies and magazines. www.metlife.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Symetra and National Brokerage Consortium Form Strategic Partnership Bellevue, Wash. — (June 20, 2006) — Symetra(SM) Financial and National Brokerage Consortium (NBC) today announced a new partnership to enhance both organizations’ ability to serve independent insurance agents and advisors nationwide. Symetra will begin making life insurance and other product solutions available through NBC, a leading independent marketing organization for the insurance industry. NBC will provide sales support and case development for Symetra via its network of 30 professional marketing agencies across the United States. Symetra anticipates the partnership will significantly expand distribution opportunities within the independent insurance provider marketplace. www.symetra.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Strong Sales Growth Reflects Mutual of Omaha's Commitment to Voluntary Group Life and Disability OMAHA, Neb., June 21 /PRNewswire/ -- Mutual of Omaha's group voluntary short-term disability (VSTD) product posted an 178 percent increase in sales growth from 2004 to 2005, according to a recently released JHA U.S. Group Disability Market Survey. With this significant growth, Mutual of Omaha now ranks sixth among its competitors for new sales premium in the JHA industry rankings for VSTD.The survey also noted a strong gain of 88 percent in new sales for the group voluntary long-term disability (VLTD) product. An additional survey, the U.S. Group Life Market Survey, conducted by JHA and sponsored by Gen Re LifeHealth, indicated Mutual of Omaha's group voluntary term life new sales premium recorded a 92 percent increase. The growth reflects Mutual of Omaha's commitment to the voluntary market as well as the increasing demand for voluntary products, according to Mutual of Omaha Senior Vice President Ivan Gilreath. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. 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. D&O LITIGATION TRENDS IN 2006 - John Black and David Burrowes discuss the current trends in securities litigation against directors and officers. http://www.irmi.com/Expert/Articles/2006/Black06.aspx CAN WE JUST FORGET ABOUT THE $100? - Dr. George Head shows an ethical dilemma between a risk manager's duty of loyalty to his firm versus the duty of good faith to the employer's insurers - http://www.irmi.com/Expert/Articles/2006/Head06.aspx A PARADIGM SHIFT IN LAW DEPARTMENT EFFICIENCY - Michael Boutot enlightens readers on the new Law Department Consortium, LLC, and its potential impact on litigation management. - http://www.irmi.com/Expert/Articles/2006/Boutot06.aspx 2005 WORKPLACE SURVEY SHOWS DECREASE IN LAWSUITS - Paul Siegel says the survey shows lawsuit decrease and supervisory training increase in survey of trends and practices in corporate America. - http://www.irmi.com/Expert/Articles/2006/Siegel06.aspx INSURING THE HOME-BASED BUSINESS (Part 2) - In this second of three articles, Rob Olson looks at court cases involving homeowners policy restrictions and what constitutes a "business." - http://www.irmi.com/Expert/Articles/2006/Olson06.aspx Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. INSURANCE NEWSLINK Articles Recent articles added to INSURANCE NEWSLINK, the worldwide, strategic concise intelligence database of over 27,000 articles including interviews, uniquely analysed by company, market, research, regulatory, and IT topics. Please click here for a content overview and a 15-day free review. THE TIME EFFECTIVE WAY TO STAY AHEAD
Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Insurance Commissioner John Garamendi Announces Arrests of Family Business Owners for Grand Theft, Workers' Compensation Fraud and Payroll Tax Evasion State’s audit of contracting business shows underreporting of employees’ wages by $1.9 million; SCIF’s audit shows business owes $2.7 million in additional premiums SACRAMENTO – Insurance Commissioner John Garamendi today announced the arrests of Clyde and Jackie Sewell, both 52, owners of North Pointe Enterprises, Inc. (North Pointe), and their daughter, Toni Studer, 30, at their place of business. The Sewells, who are residents of Elverta, were arrested June 1 and each charged with one felony count of making a false or fraudulent statement for the purpose of reducing premium, rate, or cost of workers’ compensation insurance; one felony count of grand theft; one felony count of willful failure to supply true information with the intent to evade payroll tax; and one felony count of willful failure to collect, truthfully account for and pay payroll tax. Studer, a resident of Antelope, was arrested on one felony count of making a false or fraudulent statement for the purpose of reducing premium, rate or cost of workers’ compensation insurance; one felony count of grand theft; and one felony count of assisting in supplying a false or fraudulent report to the Employment Development Department (EDD). “The kind of fraud these suspects are suspected of is, ultimately, no different than stealing money from California consumers’ wallets,” said Commissioner Garamendi. “These arrests will send a message that insurance fraud in any form will not be tolerated by this Department.” All three suspects were booked into the Sacramento County Jail with bail set at $500,000 for all three suspects. If convicted, each could be fined up to $50,000 and/or receive five years in prison or double the value of the fraud, whichever is greater. North Pointe is a large residential framing contractor business operating primarily in and around the Bay Area. It was alleged that North Pointe was not reporting the accurate amount of employee payroll to the State Compensation Insurance Fund (SCIF) and the EDD, in addition to misclassifying carpentry employees to SCIF. During investigator interviews with former and current employees, it was indicated that employees received two paychecks per pay period; one check from a payroll account with deductions, and one check from a general account without deductions. The check from the general account was allegedly for reimbursement for travel and meals. The total amount of the two checks equaled one week’s salary. It was also revealed during employee interviews that the hourly rate reflected on their paychecks was not the rate reported to SCIF. The rate reported to SCIF was higher, and therefore generated a lower monthly premium. It was found that most employees were being paid anywhere from $8 to $17 per hour. Investigators contend that North Pointe reported to SCIF that all employees earned more than $21 per hour. On April 13 and 14, 2005, the California Department of Insurance’s (CDI) Fraud Division served search warrants on the Sewell’s residence, business and bank account. EDD also conducted an audit on North Pointe’s employer account and found that North Pointe underreported its employees’ wages by $1.9 million dollars, owing EDD approximately $332,352. SCIF conducted an audit on North Pointe’s workers’ comp policy and found it was allegedly owed approximately $2.7 million dollars in additional premiums. SCIF’s Special Investigative Unit provided information which assisted in the investigation. The case is being prosecuted by the Sacramento County District Attorney’s office. This was a joint investigation conducted by CDI’s Fraud Division and the EDD. www.insurance.ca.gov Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. PAULA Financial Announces Acquisition of CPS Sacramento and Entry into Wholesale Life Brokerage Arena PASADENA, Calif.--(BUSINESS WIRE)--June 20, 2006--PAULA Financial (NASDAQ:PFCO) today announced that its operating subsidiary, Pan American Underwriters, Inc., has acquired the assets of Sacramento based wholesale life broker Lawrence B. Long Insurance Services, Inc., which operates under the name CPS Sacramento. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. HealthCare for One Gives Hope to Those in Need of Individual Health Insurance; Cornerstone's Newly Formed Company Educates Interactively CINCINNATI--(BUSINESS WIRE)--June 21, 2006--HealthCare for One LLC ( www.hcfor1.com ), an affiliate of Cornerstone Broker Insurance Services Agency, announces its launch as an online resource developed for consumers in need of individual health insurance. "According to Health Affairs, the percentage of employers offering health benefits dropped nationally from 69 percent to 60 percent from 2000-2005," said John Carroll, founder and president of HealthCare for One. "So it is no wonder that out of 9.9 million people under 65 in Ohio, 1.3 million are uninsured, and out of 3.5 million people under 65 in Kentucky, 600,000 are uninsured. More than 270,000 people in Greater Cincinnati and Northern Kentucky alone are without health insurance. Therefore, the demand for a company like HealthCare for One is monumental." As part of the health insurance distribution system, general agencies have the opportunity to be part of the solution toward reducing the number of uninsured. Because general agencies sit at the center of the health insurance pipeline, they are uniquely positioned to partner with insurance companies, agents, and their communities to be part of the answer to the health insurance problem. www.hcfor1.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. BenefitStreet Selects Canopy Financial's HealthDirect(SM) to Power Suite of Consumer-driven Healthcare Solutions CHICAGO--(BUSINESS WIRE)--June 21, 2006--BenefitStreet, a leader in on-demand solutions for comprehensive financial services and group benefits management, announced today that it has selected HealthDirect(SM) from Canopy Financial, a leading provider of financial technologies that power consumer-driven healthcare products and services for health insurers and financial institutions, to power an innovative suite of consumer-driven healthcare technology solutions for their partners which include Advisors, Brokers, Insurance Carriers, Financial Institutions and Third Party Administrators. Under the terms of this agreement, BenefitStreet and Canopy Financial are unveiling a comprehensive suite of integrated investment tools and technologies specifically for Health Savings Account administration. www.benefitstreet.com www.canopyfi.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
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21. The Willis Quality Indexsm to Benchmark Carriers on Client Service New York, NY, June 21, 2006 – Reflecting its Client Advocacy approach to serve the best interests of the client, Willis Group Holdings (NYSE: WSH), the global insurance broker, announced today that it will be launching The Willis Quality Indexsm, an initiative to benchmark insurance carriers from the perspective of servicing and supporting clients’ needs. How quickly does the carrier produce evidence that there is coverage? How long does it take them, on average, to issue a policy? How does their ability to pay compare with their willingness to pay? “We have a long established market security team that assesses the financial strength of insurance companies,” said Richard Bucknall, Willis Vice Chairman who is leading this program. “While the quality of an insurance company’s balance sheet is a critical element in helping us determine the best market to meet our clients’ needs, the industry is changing and our role is not just about the placement process. Through this effort, we will be working very closely with our carrier partners for our clients’ benefit and to raise the industry’s collective standards.” The absolute need to obtain the right coverage at the right price with the right security will remain paramount. But with market consolidation, increased regulatory scrutiny, and the need for innovation in developing insurance solutions to increasingly complex risks, brokers and carriers alike have to deliver service and value to the insureds – not just the execution of a transaction. The Willis Quality Index will consider areas including Carrier Performance, Responsiveness, Service and Ancillary Capabilities. It will include specific matrices connected to policy documentation, and claims processing and payment; plus consider a variety of aspects such as carriers' ability to respond to market trends and underwriting responsiveness. “While the mechanics of the insurance market differ by geography, the industry is here to serve the client,” Bucknall continued. “It does not matter which segment of the industry performs a specific task – physically issuing a policy or delivering the claims check. Through the Willis Quality Index, we will be looking to work in partnership with the carriers to raise everyone’s service levels.” www.willis.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Zurich Cantonal Bank increases its holding of Converium's registered shares to 10.45% Zug, Switzerland - June 21, 2006 - Disclosure of shareholdings pursuant to Art. 20 SESTA - Converium Holding Ltd has been notified that Zurich Cantonal Bank, Tessinerplatz 7, 8002 Zurich, Switzerland, increased its holding of registered shares of Converium Holding Ltd, Zug to 10.45% or 15,334,360 registered shares with voting rights. www.converium.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Identity Theft and Clinical Trial Litigation Take Center Stage at Conference TechAssure Holds Montreal Meeting of Independent Agents and Brokers Princeton, NJ—June 20, 2006—Identity theft is a front page issue. Increasingly so is the litigation that takes place when clinical trials occur in the biotech arena. These were just two of the leading concerns from today’s complex business climate that were discussed at the recent TechAssure meetings. TechAssure is the international association of entrepreneurial insurance and risk consultants specializing in mitigating the risks faced by emerging growth companies and the venture capital firms that back them. Insurance industry executives from St. Paul/Travelers and the Chubb Group highlighted industry trends. In today’s volatile world, the quest to keep personal information secure now threatens the insurance industry. “We’ve all seen the reports about information security incidents where people’s personal information has been compromised,” explained Aaron B. Latto, 2nd Vice President, Technology Claim, St Paul/Travelers. “Now we’re seeing the claims and lawsuits. It’s important to know where you stand with your insurance programs for such exposures,” he said. Clinical trials are another area where litigation is coming into play. According to Phil Fiscus, senior vice president & worldwide Life Sciences manager, Chubb Commercial Insurance, “Sponsors of clinical research are increasingly exposed to litigation as plaintiffs’ attorneys are becoming more creative in their arguments.” This leads to opportunities for the insurance industry while biotech companies reexamine their risks. “The common allegations of bodily injury, failure to warn and conflicts of interest have expanded to include therapeutic misconception, dignity harm and breech of contract,” Fiscus said. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. 26 California Nursing Homes Make Unlawful Profits, Lawsuit Alleges LOS ANGELES, CALIF. (June 14, 2006) --- Twenty-six Horizon West nursing homes in California [see list by city at end of release], are named in a class action lawsuit (Case # 06AS02465), filed Wednesday, June 14, 2006, in Sacramento Superior Court, alleging unlawful business practices, unfair and fraudulent business practices, violations of health & safety codes, and violations of the Consumer Legal Remedies Act on behalf of Hazel Adams by and through her Attorney in Fact Judy Wilken and the thousands of other citizens of the State of California who have or do reside in a Horizon West skilled nursing facility. www.lawgarcia.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. NJYIP surpasses $2M in contributions for SONJ ATLANTIC CITY, N.J.—Over the past 22 years, the New Jersey Young Insurance Professionals, partnering with the Professional Insurance Agents of New Jersey Inc., has raised more than $1.9 million to benefit Special Olympics of New Jersey. This partnership has allowed thousands of Special Olympics athletes to train and take part in various Special Olympic events. This year, the insurance trade association raised an additional $126,056 and broke the $2 million mark in overall fundraising dollars. www.piaonline.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. AGENT’S SALES JOURNAL and LONG-TERM CARE ASSOCIATION TO CONDUCT PRODUCER FIELD STUDY Clearwater, FL (June 21, 2006) -- The American Association for Long-Term Care Insurance (AALTCI) and the Agent’s Sales Journal (ASJ) announced plans today to conduct a national survey of agents and brokers who market and sell long-term care insurance. "Long-term care insurance sales are on the verge of exponential growth and our goal is to determine what's working for those agents who are already successful and identify what's needed to help the industry achieve double digit growth," explains Jesse Slome, Executive Director of AALTCI, long-term care insurance's professional trade organization. The survey will be conducted by Agent Media, publishers of the Agent's Sales Journal and Insurance Marketing magazine. Findings will be released at the 2006 National LTCi Producers Summit, the industry's premier conference that will be held November 5-7 in Austin, Texas. www..agentmediacorp.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Society of FSP Offers Free 60-Day Online Membership Newtown Square, PA – Qualified professionals now have the opportunity to “test drive” membership in the Society of Financial Service Professionals (FSP). A free 60-day trial membership is now available, during which qualified professionals can access a wealth of online resources and tools designed to build business and advance professional growth. During the 60-day trial period, qualified professionals have free access to all of the online benefits, resources and tools of membership in the Society of FSP. www.financialpro.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. Employee Benefits Firm Selects Valmark Associates for Marketing Communications Williamsville, NY, June 20, 2006 – Valmark Associates, LLC, a marketing resource company, has been selected by Health Administration Services of Houston, Texas, to provide comprehensive marketing and communications services. Valmark is providing brand positioning consultation, direct marketing support, collateral materials, and a new website. www.valmarkassociates.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. NAIC COMMENDS SENATE COMMITTEE FOR SUPPORTING AMERICAN TROOPS Vote Signals End of Abusive Sales to Nation’s Military KANSAS CITY, MO - (June 16, 2006) - The National Association of Insurance Commissioners (NAIC) is applauding action by the Senate Banking Committee that would prevent high-cost mutual funds and insurance products being sold to our nation’s military personnel. By voice vote Wednesday, the Senate Banking Committee approved S. 418, the Military Personnel Financial Services Protection Act, sponsored by Senator Michael Enzi (R-Wyo.) and Senator Hillary Clinton (D-NY). S. 418 addresses what ranking panel Democrat Paul Sarbanes of Maryland calls “misleading sales pitches and abuses.” S. 418 would ban periodic payment plans, a type of financial product that has all but disappeared from the civilian market because it carries unusually high fees and sales commissions. State insurance officials share the commitment to combat those who target the financial security of U.S. military personnel, and to provide the men and women of the Armed Forces with the highest level of consumer protection. "We commend the Senate Banking Committee's action on S. 418, which supports America's military personnel,” said John Oxendine, Georgia Insurance and Safety Fire Commissioner. “This legislation targets those who prey upon our nation's soldiers and will provide consumer protections that will benefit the soldiers and their families." Prior to the Senate action, the House had passed H.R. 458, the Military Personnel Financial Services Protection Act, which slightly differs from the Senate version. The next step will be for the full Senate to approve S. 418, and then move to a conference for final congressional approval. www.naic.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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