Daily Quote: "You can only protect your liberties in this world by protecting the other man's freedom. You can only be free if I am free." - - Clarence Darrow
1. Stock options of UnitedHealth CEO frozen By Martha Graybow - NEW YORK, Nov 30 (Reuters) - A federal judge has temporarily blocked outgoing UnitedHealth Group Inc. (UNH.N: ) Chief Executive William McGuire from cashing in any of his unexercised stock options and collecting his retirement pay. McGuire stepped down as chairman in October and his last day as CEO was Thursday, following an internal report by the insurer that concluded many of his stock option awards were likely backdated. U.S. District Judge James Rosenbaum in Minnesota ruled late on Wednesday that McGuire cannot exercise his outstanding stock options until 30 days after a special litigation committee created by the UnitedHealth board finishes its review into options-related lawsuits filed against the company. McGuire and plaintiffs in the shareholder suits had agreed to the freeze. "There has been no opposition to the joint motion for injunctive relief by any party to these matters," the judge wrote in his ruling. McGuire also is temporarily barred from collecting his retirement package, reportedly worth $5.1 million a year. McGuire's outstanding options and retirement package have "all been put on ice pursuant to the injunction," said lawyer Karl Cambronne, who brought one of the shareholder suits. The California Public Employees' Retirement System had asked the court last month for a preliminary injunction that would bar McGuire from collecting his retirement package. David Brodsky, a lawyer for McGuire, said "we are pleased that we were able to reach an agreement" with the plaintiffs on postponing the resolution of any issues concerning McGuire's employment agreement. The company said McGuire's employment has ended. It said it is acting "in the best interests of our shareholders" and will not make payments to McGuire under his employment agreement until after the special litigation committee's work is done. The judge said his order would expire on July 30, 2007, if the litigation committee review has not been finished by then. McGuire had accumulated more than $1.6 billion in stock options by the end of 2005. Under an agreement with the company announced on Nov. 8, some of his options were repriced, reducing their value by $200 million. UnitedHealth announced sweeping changes following the independent report into its options practices, including the appointment of new CEO Stephen Hemsley. The company also has said charges related to the mispriced stock options likely would be "significantly greater" than prior estimates of up to $286 million. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. UnitedHealth new CEO starts; co. reshuffles execs NEW YORK, Dec 1 (Reuters) - UnitedHealth Group Inc. (UNH.N: ) said on Friday Stephen Hemsley has officially assumed the job of chief executive officer and named three executives as presidents overseeing various business segments as part of a management restructuring.Hemsley, formerly president and chief operating officer of the U.S. health insurer, was named CEO earlier this year in the wake of a critical report into stock-options practices that led to the ouster of CEO William McGuire. The other management changes are being made "to address immediate organizational issues and to build leadership capacity for the future," UnitedHealth said in a statement. The largest health insurer by market value named three executives as presidents: Richard Anderson, Lois Quam, and David Wichmann. The moves come the day after a federal court blocked McGuire from cashing in unexercised stock options and collecting retirement pay. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. BIG “I” DISAGREES WITH SPITZER DECISION ON INCENTIVE COMPENSATION Attorney general’s ruling impacts insurance lines not implicated in illegal activities ALEXANDRIA, Va., Nov. 30, 2006—The Independent Insurance Agents & Brokers of America (the Big “I”) disagrees with, and is disappointed by, New York Attorney General Eliot Spitzer’s decision that four leading companies can no longer offer incentive compensation to agents and brokers selling their products. Spitzer today announced that he has notified ACE, AIG, St. Paul Travelers and Zurich that, under agreements reached with his office earlier this year, they may no longer offer this form of legal compensation because they have crossed the 65-percent “tipping point” in those agreements as to homeowners’, personal auto, boiler and machinery and financial guaranty insurance. Those agreements bar carriers from paying incentive compensation to their sales forces when more than 65 percent of that line of insurance is sold by companies that do not pay incentive compensation. “The independent agent and broker community is greatly distressed by this development,” says Big “I” CEO Robert A. Rusbuldt. “These carriers are now unable to use what otherwise is a perfectly legal way to compensate their sales forces, just as is done in virtually all industries across America. It is ironic that the illegal activities uncovered by Mr. Spitzer occurred in commercial lines, not personal lines, and yet, it is largely in personal lines that the fallout is being felt today. The solution imposed on carriers and agents of banning incentive compensation is totally misplaced and directed at business that was never a problem to begin with.” The Big “I” continues to defend incentive compensation as a legal, legitimate form of compensation that is employed in all sales-based industries. Any compensation system can be abused, but the problem lies with those few who abuse it, not the system itself. “There is no doubt that a few bad actors in the commercial lines area abused the system, and we have always agreed that those who break the law should be punished to the fullest extent possible,” Rusbuldt says. “But it is absolutely wrong and indefensible to penalize the innocent majority for the misdeeds of a handful of people. This decision will impact thousands of agencies across the country as they face reductions in compensation that will hamper their ability to create jobs in their communities, train staff, invest in their agencies, and provide consumers access to insurance. On behalf of the hundreds of thousands of agents and brokers across America who had no part in the dishonest activity of a few, we will continue to fight to preserve the right of companies to pay legal incentive compensation.” www.independentagent.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4.
Four Carriers Must
End Contingency Commission Jan 1 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Pay As You Drive: The Future of Auto Insurance - Webinar Scheduled for December 12th Today, auto insurers can’t afford to be in the dark about Pay As You Drive insurance. With competition heating up, companies need to seek out every advantage, and Pay As You Drive is quickly becoming a source of competitive leverage for many auto insurance firms. In this complimentary Web event, Todd Litman and John Reynolds address the advantages that Pay As You Drive provides insurers and consumers alike, including: Progressive With Respect To Income - Current insurance pricing is regressive. It forces safer/low-usage motorists on average to subsidize the insurance costs of reckless/higher-usage motorists. This problem can be corrected by Pay As You Drive. Reduced Need for Cross-Subsidies - Pay As You Drive pricing reduces the need to overcharge low-risk drivers in order to provide “affordable” unlimited-mileage insurance coverage to higher-risk motorists. Consumer savings - According to Victoria Transport Policy Institute founder, Todd Litman, the average motorist is predicted to save $50–100 per vehicle, and Pay As You Drive conveys to drivers the true costs they impose and allows them a chance to save money by reducing these costs. Teen Drivers - The addition of a teen driver to the policy is a leading cause of customer churn. Implementing a Pay As You Drive system keeps customers with new drivers from changing insurers. Technology to Keep You Ahead of the Curve - Pay As You Drive technology is extremely disruptive to the competition. Early adopters retain and attract the safest drivers almost immediately. John and Todd will discuss this disruptive technology and also the different models businesses are using in adopting the Pay As You Drive system, as well as how to avoid the common pitfalls of implementing the system. They will also address Pay As You Drive trials and cover key areas to include and avoid in your pilot and rollout programs. About the Event Date: Tuesday, December 12, 2006 Time: 12:00 PM Eastern | 9:00 AM Pacific | 5:00 PM UK | 17:00:00 UTC/GMT Duration: 1 Hour Register For Event: http://www.bulldogsolutions.net/IMS/IMS12122006/frmRegistration.aspx?bdls=8119 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 6. RILA Urges U.S. Court of Appeals to Uphold Lower Court Decision Striking Down Maryland Health Mandate ARLINGTON, Va., Nov. 30 /PRNewswire/ -- The Retail Industry Leaders Association (RILA) today delivered oral argument before the United States Court of Appeals for the Fourth Circuit urging the Court to uphold a lower court ruling that struck down Maryland's mandated health benefit statute. The appeal, argued today before a three judge panel in Richmond, Virginia, was initiated by the state of Maryland after the United States District Court in Baltimore invalidated Maryland's mandated health benefit statute in a decision issued on July 19. The Court determined that the Maryland state law was preempted by a federal law known as the Employee Retirement Income Security Act (ERISA). "RILA believes that the district court reached the right decision in this matter," said RILA President Sandy Kennedy. "Today, we respectfully urge the appeals court to uphold the district court's decision." "Congress enacted ERISA, in part, to create uniformity in national health benefit plans," said Stephen Cannon, outside General Counsel to RILA. "A patchwork of state and local health benefit mandates would only serve as a strong disincentive for employers to offer health coverage." RILA initiated the legal challenge to the Maryland law on February 7, 2006, and delivered oral argument in support of its Motion for Summary Judgment before U.S. District Judge J. Frederick Motz on June 23. The District Court granted RILA's motion and overturned the Maryland statute on July 19. The State of Maryland filed its notice of appeal shortly thereafter. RILA has taken the leading role in coordinating opposition to state and local health spending mandates under consideration in states and localities across the United States and in challenging these laws in court, when necessary. William J. Kilberg of the law firm of Gibson, Dunn, & Crutcher argued on behalf of RILA. The United States Court of Appeals for the Fourth Circuit exercises jurisdiction over district courts in Maryland, West Virginia, Virginia, North Carolina, and South Carolina. A copy of the appeal brief filed by RILA is available at http://www.retail-leaders.org. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Best’s Review: The Key to Underwriting Personal Lines Insurance is Focus OLDWICK, N.J.--(BUSINESS WIRE)--Insurers that make the greatest profits underwriting personal lines risks are not always the most well-known, but they each have found their niche or sweet spot in the insurance business, the December issue of Best’s Review reports. A.M. Best Co. examined three personal lines of insurance—private-passenger auto liability, private-passenger auto physical damage and homeowners multiple peril—and found the companies that scored the best in underwriting profitability, which doesn’t include money made from investments, often did so with a sharp focus on a particular area of expertise. Among those hitting the top with the lowest 10-year combined ratios in private-passenger auto liability were Bear River Mutual Insurance and Badger Mutual Insurance. In private-passenger auto physical damage, the top 25 included IFA Insurance and Pacific Indemnity Insurance. Achievers in homeowners multiple peril included Columbia Lloyds Insurance and Western Mutual Insurance Group. One of Bear Mutual’s strategies for success is careful selection of policyholders, the company said. For example, the insurer refuses to write an auto policy for any driver who drinks or uses illegal drugs. Columbia Lloyds credits much of its profitability to efficiency and exposure management. Western Mutual focuses on insuring midsized homes that aren’t older than 30 or 40 years. The article includes a list of the top 25 insurers in each of the three lines, ranked by 10-year combined ratio. www.bestreview.comReturn to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Modernizing Insurance Regulation Remains Top Priority for Broad-Based Financial Services Coalition Members Washington, D.C., Dec. 1, 2006 -- The financial services industry this week renewed its commitment to modernizing the nation’s insurance regulatory system through enactment of federal legislation creating an optional federal charter (OFC) for insurance agents and companies. At a meeting of the Optional Federal Charter Coalition, leaders of trade associations representing insurance companies, banks, and insurance agents and brokers, stressed the urgent need for national insurance regulatory reform. The past two Congresses have held a series of hearings about the problems with the current, state-based insurance regulatory regime. Conversations began in earnest last year about implementing a meaningful new system that would include an optional federal charter. Gov. Frank Keating, president and CEO, American Council of Life Insurers; Gov. Marc Racicot, president, American Insurance Association; and Edward Yingling, president and CEO, American Bankers Association, re-committed themselves to working for adoption of comprehensive OFC legislation in the upcoming 110th Congress. Keating, Racicot and Yingling took particular note of a recent speech on U.S. international competitiveness by Treasury Secretary Henry Paulson during which he discussed insurance and lamented the “consequence of our regulatory structure is an ever-expanding rulebook in which multiple regulators impose rule upon rule upon rule.” The Coalition agrees that insurance regulatory reform is integral to maintaining America’s leading role in the international financial services marketplace. The current antiquated, state-by-state regulatory system reduces U.S. competitiveness in the global insurance arena, when competing head-to-head with more efficient and modernized foreign markets. Consumers are also harmed because they ultimately pay the costs for a regulatory system riddled with redundancies and red tape that ultimately deprives consumers of the best possible services and product innovations. Other key points that Coalition members agreed to emphasize in their visits with individual members of Congress include: • The insurance regulatory system's lack of uniformity fails the test of an efficient regulatory structure that is geared to the needs of a sophisticated and highly-mobile public. • The current 50-state regulatory arrangement illustrates clearly why America is in danger of losing its edge as the leader of the financial services industry. • A uniform, national regulatory structure, with improved consumer safeguards represents the best hope to modernizing insurance regulation Coalition members all agreed that the 109th Congress, with OFC bill introductions and insurance reform hearings in both chambers, served as a platform and the source of momentum for more significant advancement of legislation during the 110th Congress. The OFCC represents the largest and most diverse group to push for a modernized insurance regulatory system. Trade group members include Agents for Change, American Bankers Association, American Bankers Insurance Association, American Council of Life Insurers, American Insurance Association, The Council of Insurance Agents and Brokers, The Financial Services Forum, The Financial Services Roundtable and the Life Insurers Council. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Disaster insurance high on US House's Frank's list By Kevin Drawbaugh - WASHINGTON, Nov 30 (Reuters) - Bolstering the insurance industry against terrorist attacks and hurricanes will be a "very high" priority for the House Financial Services Committee after Democrats take over Congress in January, incoming committee Chairman Barney Frank said on Thursday. "The whole question of disaster insurance will be high on the priority list," the Massachusetts lawmaker told reporters. Congress is considering possible renewal of a post-9/11 federal insurance program covering terrorism risk. Also under consideration is a post-Katrina boost for the National Flood Insurance Program. The Financial Services Committee will have jurisdiction over both issues in the next Congress. Frank's remarks were likely to be greeted warmly by the insurance industry. But he was less in line with industry objectives in remarks he made about the possibility of letting insurers choose either a federal or state charter. Frank said there is a need to differentiate life insurers from property and casualty (P&C) insurers in the debate. Life insurance resembles a uniform financial product nowadays that might be fairly offered by nationally chartered firms. He said he does not view P&C insurance in the same way. "I'm skeptical of the argument for nationalizing P&C insurance," he said at a financial consumers conference. The insurance industry is regulated now by the 50 states in a patchwork system insurers say is too costly and complex. A bill was introduced in the Senate earlier this year to create an optional federal charter for insurers and a new federal regulatory agency to administer it. Top insurers, such as Allstate Corp. (ALL.N: ), have favored such an approach. State officials oppose the Senate bill, saying the states are best suited to respond quickly on local insurance issues. Consumer advocacy groups also warned that an optional federal charter would let insurers play state and federal rules against one another, possibly at the expense of consumers. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. The Top 10 Health Stories of 2006, From the Harvard Health Letter BOSTON, Nov. 30 /U.S. Newswire/ -- Editors of the Harvard Health Letter, in consultation with the doctors on its editorial board, have chosen the top 10 health stories of 2006. Here they are:
The Harvard Health Letter is available from Harvard Health Publications, the publishing division of Harvard Medical School, for $28 per year. Subscribe at http://www.health.harvard.edu/health or by calling 1-877-649-9457 (toll free). EDITOR'S NOTE: Contact Christine Junge at Christine_Junge@hms.harvard.edu for a complimentary copy of the newsletter, or to receive press releases directly. http://www.usnewswire.com/ /© 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. U. S. Labor Department Sues Iowa Association to Recover Millions in Employee Benefit Plan Assets DES MOINES, Iowa, Nov. 30 /U.S. Newswire/ -- The U.S. Department of Labor filed a lawsuit against the Iowa Association of Business and Industry (ABI), Des Moines, Iowa, for retaining all the proceeds from a stock distribution by Principal Mutual Insurance Co. that was based on employee benefit plan premiums paid to the insurer by employers participating in the association and their employees. Approximately 1,500 employers are members of the trade association. "The department is taking this legal action on behalf of the association's members and their workers,"said U.S. Secretary of Labor Elaine L. Chao. "The benefit plans belonging to these Iowa businesses and workers are due millions of dollars and the department is seeking a court judgment to recover these assets for them." The association received 870,373 shares of Principal stock when the insurer converted from a mutual insurance company to a corporation in 2001. As a result of the change in organization, Principal distributed compensation in the form of cash or stock to eligible policyholders. At the time of the distribution, ABI operated a group insurance program whereby participating employers purchased life insurance, long-term disability, medical expense and other types of insurance coverage from Principal and paid premiums directly to Principal. After receiving the Principal shares, ABI sold the stock and currently retains the proceeds, after expenses, in a trust. The lawsuit alleges that ABI violated the Employee Retirement Income Security Act (ERISA) when it accepted and retained proceeds from the sale of the Principal stock. The suit seeks a court judgment declaring that proceeds from the stock that are attributable to employee contributions are plan assets and to bar ABI from receiving any portion of the insurance proceeds that are deemed plan assets. The department also asks the court to appoint an independent fiduciary to determine the amount of the proceeds that are plan assets and that any plan assets be turned over to that fiduciary for distribution to appropriate beneficiaries. The suit, filed in the U. S. District for the Southern District of Iowa, resulted from an investigation conducted by the Kansas City regional office of the Employee Benefits Security Administration (EBSA). Employers and workers can reach the regional office at 816-426-5131 or EBSA toll-free at 1-866-444- EBSA (3272), for help with problems relating to private-sector retirement and health plans. (Chao v. Iowa Association of Business and Industry) Civil Action No. 4:06-cv-00572. U.S. Labor Department releases are accessible on the Internet at http://www.dol.gov/ebsa. http://www.usnewswire.com/ /© 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Former AIG Exec Ousted Over Financial Misconduct, Funds Plan to Weaken Sarbanes-Oxley Reforms LOS ANGELES, Nov. 30 /U.S. Newswire/ -- Former AIG insurance executive Maurice Greenberg, who was ousted because of accounting manipulations and misrepresentations, runs the foundation that funded a report released today that would weaken the post-Enron corporate governance and accounting standards that helped uncover AIG's misconduct. Earlier this year, AIG acknowledged intentionally misleading regulators, investors and policyholders and agreed to pay $1.6 billion in reparations to settle a suit brought by New York Attorney General Eliot Spitzer. The company also restated its earnings by more than $3 billion. A civil suit accusing Greenberg of fraud and other sham accounting maneuvers is still pending. The charges include false transfers of reserves and the creation of offshore entities to prop up AIG's performance. "The power given to prosecutors and the personal responsibility of CEOs created under Sarbanes-Oxley were key contributors to Greenberg's ouster from AIG," said Carmen Balber at the Foundation for Taxpayer and Consumer Rights. "This proposal is an attack by a discredited CEO against the corporate governance laws that ended his 37-year reign at the helm of AIG." USA Today reported the study was funded by the Starr Foundation, which was established by the founder of AIG and is now chaired by Maurice Greenberg. The committee's proposals would undermine existing investor and consumer protections. They include:
"Corporate CEOs are using the cover of academia to lobby for less accountability to American shareholders while corporate scandals continue to fleece the public," said Balber. "We should be looking for ways to strengthen our investor protections, not throwing them back to the wolves." The Foundation for Taxpayer and Consumer Rights is California's leading non-profit and non-partisan consumer watchdog group. For more information visit us on the web at http://www.ConsumerWatchdog.org http://www.usnewswire.com/ /© 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Insurance Broker Capacity Coverage Alerts Companies About Costly Workers Compensation Mistakes Mahwah, N.J., Nov. 30 /PRNewswire/ -- New Jersey-based insurance broker Capacity Coverage is warning businesses to avoid a costly workers compensation mistake. Many businesses don't realize there are "monopolistic states" where the state controls all Workers Compensation insurance -- Wyoming, North Dakota, Washington, and Ohio. West Virginia recently changed its monopolistic status by naming BrickStreet Mutual Insurance as its sole carrier. Other insurers will be added as of July 1, 2008. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. OneBeacon Purchases National Marine Underwriters BOSTON, Nov. 30 /PRNewswire-FirstCall/ -- OneBeacon Insurance Group (NYSE: OB) announced today that is has acquired ownership of National Marine Underwriters, a yacht-specialty Managing General Agent with a 20-year history of writing recreational marine business. National Marine Underwriters will become a part of International Marine Underwriters (IMU), a division of OneBeacon Insurance Group that offers ocean marine solutions for hull, marine liabilities, and private-pleasure yachts, as well as ocean cargo. Based in Annapolis, Maryland, National Marine Underwriters is licensed to operate in the 48 continental states and the District of Columbia. www.onebeacon.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Independent Insurance Investments, Inc. Acquires Omni Insurance Group CONSHOHOCKEN, Pa., Dec. 1 /PRNewswire/ -- Independent Insurance Investments, Inc. ("Independent") today announced that it has completed the acquisition of the Omni Insurance Group ("Omni") from The Hartford Financial Services Group Inc. (NYSE: HIG). Omni is a non-standard auto insurance company that generated net written premiums of $174 million in 2005, employs approximately 250 people and distributes its products through a significant network of independent agents. Omni writes business in over 40 states. Independent, a non-standard auto insurance specialist, was itself acquired in December 2004 in a transaction backing incumbent management with equity capital provided principally by Inverness Partners II, LP ("Fund II"), a private equity fund managed by Inverness Management LLC ("Inverness"). Inverness and certain of its limited partners provided substantially all of the equity capital required for the Omni acquisition. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Old Republic Completes Acquisition of Contractors Insurance Business CHICAGO, Nov. 30 /PRNewswire-FirstCall/ -- Old Republic International Corporation (NYSE: ORI), today confirmed that its subsidiary, Old Republic Insurance Company, has completed its previously announced acquisition of a casualty insurance underwriting division of Aon Corporation ("Aon"). Old Republic is acquiring policy renewal rights and related assets for a total purchase price of $85 million, and is assuming certain liabilities associated with Aon's Construction Program Group ("CPG"). With current annual premium volume of approximately $260 million, CPG provides specialized casualty insurance coverages and services to trade contractors, general contractors, and large commercial construction projects. Renamed Old Republic Construction Program Group, Inc., the acquired business has been organized as a joint underwriting venture between Old Republic and certain principals associated with Aon's CPG division. www.oldrepublic.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Arthur J. Gallagher & Co. Acquires William H. Connolly & Co. ITASCA, Ill., Nov. 30 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today announced the acquisition of William H. Connolly & Co. of Montclair, New Jersey. Terms of the transaction were not disclosed. Incorporated in 1950, William H. Connolly & Co. is a retail insurance broker offering commercial and personal insurance products and services as well as employee benefit packages and individual and group life and health coverage to its clients located throughout the Northeast. They specialize in programs for healthcare providers, metalworkers, universities, not-for-profit organizations and law firms. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Aon Closes Sale of Both Aon Warranty Group and Construction Program Group CHICAGO, Nov. 30 /PRNewswire-FirstCall/ -- Aon Corporation (NYSE: AOC) announced today the close of the sale of Aon Warranty Group (AWG) and its worldwide operations (including Virginia Surety Company) to Warrior Acquisition Corp., an affiliate of Onex Corporation, and the close of the sale of Construction Program Group (CPG) to Old Republic Insurance Company. The sale of AWG and CPG is expected to result in sales proceeds and dividends in excess of $800 million. Net cash proceeds are subject to final transaction costs and certain post closing adjustments. The Company currently expects to record a pretax gain and a modest after-tax loss associated with these transactions during the fourth quarter 2006. www.aon.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Employers Direct Joins California Grocers Association AGOURA HILLS, Calif.--(BUSINESS WIRE)--Employers Direct Insurance Company, a direct writer of California workers’ compensation insurance, is pleased to announce that it has joined the California Grocers Association (CGA), a Sacramento-based trade association that has been the voice of the California food industry since 1898. www.cagrocers.com www.employersdirect.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. 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21. Hospital CEO Cites HMO Abuses of Patients and Providers at NY Legislative Hearing Health Insurance Industry Consolidation Empowers HMOs to ‘Game the System’ Unchecked by Regulators NEW YORK--(BUSINESS WIRE)--Patients, doctors and hospitals in New York are being “strong armed” by HMOs who “game the system to shift to their members, to publicly supported hospitals, and ultimately to the tax paying public, what should be the financial obligations of the HMOs,” according to David P. Rosen, CEO of three hospitals in New York City. Testifying today in Manhattan at a joint hearing of the New York State Assembly Committee on Health and the Committee on Insurance, Mr. Rosen, CEO of Jamaica Hospital Medical Center, Flushing Hospital Medical Center, The Brookdale University Hospital and Medical Center, and the MediSys Health Network, addressed legislative concerns about “consolidation in the health insurance industry and its impact on health care services, patients and providers.” Citing the report released this week by the New York State Commission on Health Care Facilities in the 21st Century that recommended hospital closings throughout the state, Mr. Rosen said that “the HMOs are like the 800 pound gorilla sitting in the living room that is being ignored in discussions of how to fix our broken healthcare system.” Mr. Rosen told the legislators that “the abuses of the health insurance industry are a direct result of the concentration of financial and market power in an industry that operates free of meaningful regulation and enforcement. The consolidation of insurers with overwhelming market share has enabled their exploitive business practices which have been foisted upon consumers and providers.” As a remedy he recommended that in recognition of the “direct correlation between the excessive profits HMOs generate and the financial weakness of our hospitals,” that new regulations be created to “compel reinvestment by HMOs into our healthcare system, similar to the requirement that property and casualty insurers make contributions in proportion to their share of the market to support the State Guaranty Fund.” In recognition of the need for stronger enforcement tools he also proposed that the legislature create a “new statutory cause of action that may not be arbitrated whenever a service provider can establish a pattern of statutory or regulatory violation, to allow the service provider to recover a penalty and attorneys’ fees,” similar to the way “the SEC’s enforcement apparatus is supplemented by statutes permitting stockholder class action suits.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Leading Provider of Consumer-Directed Health Plans Offers Rebuttal to Kaiser Family Foundation Data Decade-plus worth of data tells a different story CHICAGO--(BUSINESS WIRE)--A Kaiser Family Foundation survey of members of consumer-directed health plans (CDHP) today was described as “biased and misleading,” because it failed to factor in the type of plan to which the survey respondents belonged. Arthur C. Carlos, CEO of pioneer-CDHP provider Destiny Health, said the problem traces to the fact that under the current overly-simple definition, any high-deductible plan combined with a health savings account (HSA) or health reimbursement account (HRA) can be called a CDHP. “The Kaiser Family Foundation study points up a real danger in the marketplace, that is, by failing to discriminate between good and bad plans, wrong-headed views of CDHPs get accepted as fact,” Carlos said. “The truth is, well-designed CDHPs can play an important role in addressing this nation’s health care crisis by both lowering costs and motivating people to adopt healthier lifestyles. The proof is there, but only when you separate the wheat from the chaff.” www.destinyhealth.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. CNA Study Analyzes Professional Liability Claims, Offers Risk Management Solutions for Physical Therapists CHICAGO--(BUSINESS WIRE)--A new study recently published by CNA insurance companies is an educational resource to assist physical therapists with identifying and managing risk. The Physical Therapy Claims Study examines key elements of physical therapists’ professional liability claims and presents practical risk management strategies that can be incorporated into clinical practice. Copies of this study are available from CNA by calling 888-600-4776 or accessing the CNA Web site at www.cna.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Aspen Insurance Holdings Limited Announces Repurchase of $156 Million of Ordinary Shares from Founding Shareholders HAMILTON, Bermuda--(BUSINESS WIRE)--Aspen Insurance Holdings Limited ("Aspen") (NYSE:AHL) (BSX:AHL BH) today announced it has agreed to repurchase approximately $156 million of its ordinary shares, representing approximately 5.9 million shares, from two of its founding shareholders: The Blackstone Group and CSFB Private Equity. The shares are to be repurchased at a price per share of $26.50, representing a 1.7% discount to the closing price on November 30, 2006. Following the share repurchase, Blackstone Group will hold approximately 11.4 million shares and CSFB Private Equity will hold approximately 4.4 million shares. www.aspen.bm Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. UnitedAuto Announces Pricing of $325 Million of Senior Subordinated Notes BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today announced the pricing of $325 million aggregate principal amount of 7.75% senior subordinated notes due 2016 (the “Notes”). The Notes were offered to qualified institutional buyers in a private placement pursuant to Rule 144A of the Securities Act of 1933. www.unitedauto.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. Lincoln Financial Group Announces Redemption of all 8.14% Series A Capital Securities PHILADELPHIA, Dec. 1 /PRNewswire-FirstCall/ -- Lincoln National Corporation (NYSE: LNC) today announced that its wholly owned subsidiary and successor to Jefferson-Pilot Corporation, Lincoln JP Holdings, L.P., has called for redemption of all of the $200 million outstanding 8.14% Capital Securities, Series A ("Series A Capital Securities") issued by Jefferson-Pilot Capital Trust A (CUSIP No. 475529AA1) and guaranteed by Lincoln JP Holdings. www.LFG.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Malakut Insurance Brokers opened a representative office in Vietnam (Hanoi) Hanoi 1 December, 2006 – Malakut Insurance Brokers, JSC operating on the international reinsurance and insurance markets opened a representative office in Vietnam (Hanoi). The solemn ceremony took place on the 1st of December. Malakut is the first Russian insurance institute opened in Vietnam. Malakut has all means and capabilities to become the biggest reinsurance broker in Vietnam. The Company's specialization is servicing and consulting of corporate clients and reinsurance of different types of risks, such as: Construction, Energy, Property, Marine especially Ship Builders, Space and Aviation. Malakut plans to operate in the whole South-East Asian region from the rep office in Vietnam. In the future Malakut plans to make this rep office in a separate daughter company. www.malakut.vnwww.malakut.ru Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. PIANJ supports bill to prohibit step-down provisions TRENTON, N.J.—The Professional Insurance Agents of New Jersey Inc.’s past President Paul Monacelli, CIC, CPIA, recently gave testimony before the New Jersey Senate Commerce Committee in support of bill number S-1666. The bill would prohibit the use of step-down provisions in businesses’ motor vehicle liability insurance policies and would reverse the effect of the Supreme Court of New Jersey’s decision in Pinto v. New Jersey Manufacturers Insurance Co. In the case, the court decided that step-down provisions in business auto policies are enforceable. Step-down provisions allow insurance companies to reduce the coverage available to employees not individually named on their employer’s business auto policy. www.piaonline.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 30. Call Center Earns “Best in Class” Recognition - Assurant Employee Benefits’ Call Center honored from among 30 entries KANSAS CITY, MO – The Dental Claims Call Center of Assurant Employee Benefits was recently named first runner-up from a field of more than 30 entries in the 2006 “Best in Class” competition of Call Center IQ’s Call Center Excellence Awards. Aligned with Assurant Employee Benefits’ corporate strategy of being easy to do business with, the Dental Claims Call Center has adopted several tactics that have set it apart from competitors, such as cross-training all employees to meet a variety of customer needs, and melding work from three individual call centers into one pool to provide more rapid and consistent customer service. www.assurantemployeebenefits.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 31. Caregiver Discrimination Lawsuits Against Employers Increase – New Employee Benefit and HR Tool Can Help Lower Risks while Reducing Lost Productivity Costs December 1, 2006 – Madison, Wisconsin – NavGate Technologies ( www.NavGate.org ), a pioneering industry leader and developer of technology-based care planning solutions for the whole family, has created a revolutionary new tool designed to help employees and employers address the significant problem of balancing care related work/family responsibilities. With the significant increase in the number of family responsibilities discrimination lawsuits filed by employees, this innovative and inexpensive proprietary system known as CareOptionsOnLine™, or COOL™, can help reduce employer liabilities and lost productivity costs. It is also proving to be what every employee needs to help navigate the increasingly demanding dual pressures of caregiving and working. For years employers have espoused their commitment to work/family balance, often achieving favorable publicity as a result. However, behind the headlines, some employers have done little to support this work/family balance appropriately when it comes to caregiving and eldercare issues. In fact, between 1996-2005, the number of family responsibilities discrimination cases filed grew nearly 400 percent from the previous decade, according to a recently published study by the Center for WorkLife Law at the University of California Hastings College of the Law. NavGate’s president and CEO, Robert Pearson says, “Experts estimate that two out of five American workers currently care for spouses, children, parents or parents-in-law who are ill, disabled or elderly and this number is expected to rise significantly in the coming years. The challenge of trying to balance work demands with caregiving responsibilities may lead employees to feel both unsupported by their employer and discriminated against if they perceive they have been passed over for advancement due to their caregiving responsibilities.” “CareOptionsOnLine takes much of the stress and confusion out of the situations that confront people who must care for an elderly parent or family member who is ill or disabled while maintaining a demanding work schedule,” says Michael Bina, Principal, Intellectual Marketing ( www.intellectualmarketing.com ). “Employers who offer COOL to their employees are providing them with tools to manage the demands of work and family while demonstrating to employees they care about them and their families. These employees are less likely to sue because they believe their employer cares. It just makes good risk management sense to implement such an accessible and useful tool.” “COOL is the most comprehensive solution available in the market today,” states Pearson. “Many employers mistakenly believe their employee assistance programs (EAPs) are in place to address these caregiving issues. Unfortunately, EAPs don’t specialize in areas related to providing real solutions for caregiving responsibilities. Consequently, employees feel a sense of isolation and lack of support, leading to the potential for lawsuits.” For Employers, HR Professionals, Benefits Managers and Benefit Consultants to request information about COOL solutions go to www.NavGate.org, email Info@NavGate.org or contact directly: Robert Meister, CCRS, LTCGS, 866-637-2617. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 32. Independent Insurance Agents & Brokers of New York Rebuffs NYC Comptroller’s Report (DeWitt, New York, Nov. 30, 2006) — The Independent Insurance Agents & Brokers of New York today rejected the conclusions contained in a report issued Nov. 29 by the New York City Comptroller’s Office. The report, titled Highway Robbery: The High Cost of Automobile Insurance in New York, examined trends in personal automobile insurance premiums and losses in New York over the past five years. However, the state’s oldest and largest insurance producer organization believes the comptroller’s recommendations of mandatory rate reductions and increased government intervention in the market will make the cost of auto insurance worse for New Yorkers. The Trusted Choice® independent insurance agents and brokers who belong to IIABNY represent multiple insurance companies. Because of this, they are in a unique position to assess the health of the market. They know from observation that New York has a very competitive auto insurance market, with dozens of companies vying for business. In fact, as the comptroller noted, auto insurance companies have reduced their premiums by $500 million since 2004. Unfortunately, New York’s “prior approval” system for approving insurance rates actually inhibits insurance companies from lowering rates further. That’s because requests for rate changes must work their way through the bureaucracy of the Insurance Department, a process that can be slow and arduous. In the 1990s, New York law gave companies the ability to increase or reduce rates by up to seven percent without prior approval. However, the state legislature allowed this “flex rating” authority to expire early in this decade and has refused to reinstate it. This prevents companies from lowering rates as quickly as they would like when market conditions warrant. “The path to lower auto insurance costs is not enforced rate reductions, control of insurance prices by localities, or more bureaucracy in the Insurance Department, as the comptroller has suggested,” said Richard A. Poppa, president and chief executive officer of IIABNY. “When companies have more incentives to compete, market forces inevitably lead to better products and lower prices for consumers.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 33. General Casualty expands commercial coverage Sun Prairie, Wis.— General Casualty is expanding its commercial liability coverage on policies effective Dec. 1 and after, making the company’s program significantly more comprehensive than standard industry forms.The Wisconsin-based property and casualty insurer enhanced its Commercial General Liability Coverage Extension Endorsement, which is automatically included for no additional cost with all commercial package and monoline general liability policies. http://generalcasualty.com www.winterthur.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 34. NAIC RELEASES ANNUAL AUTO INSURANCE DATABASE REPORT KANSAS CITY, Mo. (Dec. 1, 2006) – The National Association of Insurance Commissioners (NAIC) today announced the release of its 2003/2004 Auto Insurance Database Report, which provides the average costs associated with personal automobile insurance nationwide. The report, which features vital state-by-state auto insurance data, is designed to provide necessary information and analysis to insurance regulators, consumers and policymakers. Developed by the Statistical Information Task Force of the NAIC’s Property and Casualty Insurance (C) Committee, the 2003/2004 report was compiled to make information about cost factors in each state readily available to the public, as well as insurance regulators monitoring the market. www.naic.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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