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1. Wilbur Ross plans $100 mln investment in insurance By Ed Leefeldt - NEW YORK, Nov 15 (Reuters) - Billionaire turnaround specialist Wilbur Ross said on Wednesday he is about to make a $100 million investment in the reinsurance industry, his latest vote of confidence in the sector. Ross has already put more than $125 million into reinsurers, who provide backup coverage to home, car and commercial carriers in the event of major catastrophes. He said that "before the end of the year" he plans to boost his investment in the sector, which has been bolstered by an absence of hurricane-related losses this year. "While there will probably be greater catastrophes going forward, the premiums have gone up enough to provide an adequate return," he told Reuters in an interview at the China Institute in America. In 2005, Hurricanes Katrina, Rita and Wilma devastated the Gulf Coast, costing insurers $68 billion in claims. Reinsurers, often based in Bermuda because of favorable tax rules, paid more than $20 billion of that figure, and two reinsurers went out of business. Since then new money has come in to replace those losses, much of it from private equity firms such as Thomas H. Lee Partners L.P., Citadel Investment Group, Greenlight Capital Inc. and Ross, according to data compiled by Willis Group Holdings Ltd. (WSH.N: ) Ross' New York-based company, W.L. Ross & Co. LLC, previously invested about $25 million in Blue Ocean, a wholly owned subsidiary of Montpelier Re Holdings Ltd. (MRH.N: ) In May, Ross injected $100 million into Montpelier itself, taking a 7 percent stake. Ross also joined the board of Montpelier, among the hardest hit of the Bermuda reinsurers. Montpelier lost almost 60 percent of its value between July 2005 and the time Ross, who is known for turning around troubled companies, bought his stake. It has since risen about 25 percent. A COMPLICATED DEAL Ross said he expected to do a "more complicated deal for over $100 million" but declined to provide further details. "We feel good about the January 2007 renewal period (when most insurers renew their contracts)," Ross said. "They will be similar to July renewals, when a lot of companies couldn't even find an insurer." Those who did often paid double the previous year's price, or more, according to property insurers. In this year's third quarter, property and casualty insurers' earnings soared as a mild hurricane season led to a plunge in U.S. catastrophic losses. Ross doesn't expect that to continue, but said the increased premiums that reinsurers will get in eight or nine out of 10 years "will more than justify the losses in the other two." Asked about other possible investments, Ross declined comment on car parts suppliers Collins & Aikman Corp. (CKCRQ.PK: ) and Delphi Corp. (DPHIQ.PK: ), adding he was restricted from saying more because of confidentiality agreements signed by prospective bidders. Ross specializes in turning around distressed companies. He formed International Textile Group in 2004 by merging the assets of two struggling fabric companies and has also consolidated the steel industry. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. U.S. Sen. Dodd urges lasting terror insurance fix By Kevin Drawbaugh - WASHINGTON, Dec 7 (Reuters) - The next chairman of the U.S. Senate Banking Committee said on Thursday he wants a permanent solution to insuring terrorism risk rather than another extension of a temporary government program. "I will not do another extension. It's either going to be a permanent bill or not, in my view," Connecticut Democrat Chris Dodd told reporters at a briefing on his goals as committee chairman. He will take over the panel next month. The senator's remarks differed from a position staked out on Wednesday by his counterpart in the U.S. House of Representatives. Rep. Barney Frank, the Massachusetts Democrat who will take over the House Financial Services Committee, said he could "guarantee" further extension by Congress of the government's federal insurance program covering terrorism risk. But Frank said he was disinclined to make the Terrorism Risk Insurance Act (TRIA) program permanent, as many insurers favor. The program is scheduled to expire at the end of 2007. The Sept. 11, 2001, attacks on New York and Washington cost insurers billions of dollars. Shortly afterward, the TRIA program made the government an insurer of last resort if private insurers cannot handle massive terrorism damages. Dodd said: "I've asked the insurance industry and the real estate industry, two of the principals affected by this, to sit down and work, all together, to see if they come to some kind of common ground and understanding themselves." Such industry negotiations are needed because otherwise it would be "almost impossible to move forward" with legislation, he added. Some major insurers are based in Dodd's home state, such as The Hartford Financial Services Group Inc. (HIG.N: ). "My goal here is to establish a permanent piece of legislation, not a temporary one," Dodd said. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. RIMS Media Advisory: RIMS ISSUES POSITION ON A LONG-TERM SOLUTION TO TERRORISM EXPOSURE RIMS has been at the forefront of the introduction, adoption and extension of the Terrorism Risk Insurance Act. Our members have testified before Congress, and we have brought our message personally to Capitol Hill. With this vital legislation set to expire on December 31, 2007, RIMS is proud to issue its “Position on a Long-Term Solution to Terrorism Exposure”. We will continue to work closely with leaders in Congress, as well as industry partners to ensure that there continues to be a federal back stop to terrorism exposure in the United States beyond 2007. POSITION ON A LONG-TERM SOLUTION TO TERRORISM EXPOSURE Terrorism is one of the largest and least predictable catastrophic exposures for businesses. The Risk and Insurance Management Society, Inc. (RIMS), the largest association of risk managers in the United States, is very concerned about the fast-approaching expiration date of the Terrorism Risk Insurance Act (TRIA) on December 31, 2007 without any long-term successor program in place. Without the stability offered by a permanent long-term solution, our members are faced with an uncertain and costly marketplace that is not equipped to assist in the protection and sustainability of our country’s assets. Accordingly, something must be done to ensure that terrorism insurance continues to be available to buyers of commercial insurance in a comprehensive and affordable manner once TRIA expires. Time is of the essence. RIMS is prepared and willing to work with public and private organizations to develop a solution or consensus opinion in order to have a unified approach before Congress. There are a number of proposals that have been issued by the insurance industry and from representatives of the real estate and financial services markets. RIMS membership includes representatives of all of these industries, as well as businesses across the broad spectrum of the economy. Through ongoing discussions and polling of our membership, RIMS has identified critical factors that should form the foundation of any solution. Therefore, rather than endorsing a particular plan or developing one of our own, RIMS embraces four principles that we feel should underlie any plan that is adopted. 1. RIMS members believe that a private/public partnership provides the best alternative to addressing the long-term needs of availability and affordability of insurance to cover acts of terrorism. 2. Any solution needs to address the long-term availability and affordability of insurance coverage for nuclear, biological, chemical and radiological (NBCR) events caused by terrorism. 3. RIMS believes that all commercial property, workers’ compensation, and liability lines should be included in any new plan. 4. RIMS believes that insurance companies writing commercial lines should be required to participate in the program and be required to make coverage available for acts of terrorism. Having adequate insurance coverage for U.S. businesses is important to the economic well-being of the nation. Without TRIA or a viable permanent substitute, RIMS believes, insurance companies will review their portfolios of business and will refuse to continue covering certain risks and areas where they are overexposed. We believe this will be true for workers’ compensation, property and even third party liability lines of coverage. It will affect all businesses both large and small. Such reductions in the supply of coverage available could result in a significant national economic crisis. Many businesses in the United States rely on global insurance companies for coverage. These insurers decide where to underwrite risk based on their assessment of overall profitability and return to their shareholders. If the risk to write coverage is perceived to be too great, U.S. companies will be left without the coverage they need to operate. Conclusion RIMS has been directly involved in the creation and extension of TRIA, and looks forward to continuing to work with public and private organizations to ensure that terrorism insurance remains available and affordable for U.S. companies. Unless other market-driven alternatives are developed, many of the over 4,000 commercial policyholders that RIMS represents will experience exorbitant property, workers compensation and liability insurance rates for significantly less coverage, if it is available at all. Businesses may experience a complete loss of protection from terrorist acts, as a result of insurance companies’ inability to obtain reinsurance protection. Time is of the essence to develop a long-term solution. Without a solution in place by December 31, 2007, the Country faces a potential catastrophic exposure to the economy. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Comprehensive Bill to Provide Immediate Relief to Disaster Victims Introduced Small Business Disaster Response and Loan Improvements Act of 2006 Builds on Previous Proposals WASHINGTON, Dec. 7 /U.S. Newswire/ -- In her capacity as Chair of the Senate Committee on Small Business and Entrepreneurship, U.S. Senator Olympia J. Snowe (R-ME) along with Ranking Member John Kerry (D-MA), and Committee Members Senator Mary Landrieu (D-LA) and Senator David Vitter (R-LA) today announced that they have introduced the Small Business Disaster Response and Loan Improvements Act of 2006 (S. 4097), comprehensive bipartisan legislation that builds on previous proposals to provide immediate and meaningful relief to disaster victims. "This legislation includes disaster provisions which will provide the SBA with the tools necessary to fully assist and aid America's small businesses in the wake of a disaster," continued Senator Snowe. "I have worked closely with a bipartisan group of Senators - including Senators Kerry, Landrieu and Vitter in addition to the SBA -- to design this disaster legislation and I am pleased to announce that the product of our efforts has been introduced today. This legislation will remedy the problems that prevented or delayed the agency's front-line employees working in the disaster zones from aiding victims during the 2005 Gulf Coast Hurricanes, and provides the SBA with the ability to provide a more comprehensive and aggressive response to future disasters." http://www.usnewswire.com/ /© 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Connecticut AG adds Allstate to antitrust probe Fri Dec 8, 2006 1:29pm ET - NEW YORK (Reuters) - Connecticut Attorney General Richard Blumenthal said on Friday his probe into the insurance industry will now include Allstate Corp.'s (ALL.N: ) decision to stop writing new homeowners' policies in his state. The news had little effect on Allstate's stock. The company's shares rose more than half a percent, or 39 cents, to $64.05 in early afternoon trading on the New York Stock Exchange. Allstate said on Thursday that it would no longer write new policies in Connecticut, New Jersey and Delaware. Allstate, the largest publicly traded home insurer in the United States, has been moving out of storm-prone and coastal areas since the 2005 hurricane season, when it lost more than $3 billion from claims. Allstate spokesman Michael Trevino had no immediate comment on Blumenthal's announcement. The Connecticut attorney general's insurance probe started in August and involved antitrust subpoenas issued to nine insurers that were requiring Connecticut homeowners to install hurricane shutters, including Allstate. Blumenthal said in a statement he was currently seeking information from Allstate about unreasonable requirements and premium increases by the company and other insurers "reflecting possible anti-competitive patterns in the industry." The other insurers are mostly private companies. Blumenthal said his probe will now include Allstate's announcement to stop writing new homeowners insurance policies and increasing premiums on existing ones. "Even if Allstate may be within its legal rights to cease doing business in Connecticut, its decision may be the result of other anti-competitive or antitrust practices," Blumenthal said. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
Workplace Benefits Renaissance 2007 The people and organizations involved in the sales and service of Workplace Benefits have a premier opportunity to network and learn at the Workplace Benefits Renaissance Meeting to be held on the corner of Bourbon and Canal Street in the heart of the French Quarter at the Astor Crowne Plaza Hotel, New Orleans, La. The dates are February 13, 14, & 15, 2007. This will be the 10th Benefits Renaissance Meeting, but the first under the “Workplace Benefits Association” label. Expected attendance is 125 of the leading Workplace Benefit vendors and 800 total workplace benefit consultants. The Members of the Workplace Benefits Association strive to bring an integrated solution through a master plan that involves a standardized employer guide and checklist. This procedure ensures that no important area is overlooked while providing the flexibility for each employer and employee to create an individual solution to their benefits and financial planning. (Proviso - The Workplace Benefits Association does not sell workplace benefits and is not in the business of offering advice) www.workplacebenefits.org 6. Marsh CEO says he's still mulling sale of Putnam NEW YORK, Dec 7 (Reuters) - Marsh & McLennan Cos. Inc. (MMC.N: ) Chief Executive Michael Cherkasky said on Thursday he was still considering whether or not to sell the insurance broker's Putnam asset management unit and would decide by early 2007. Boston-based Putnam was put on the block by Marsh in September. Cherkasky said the process was a "market check" to see what its value would be if sold. He said Marsh had gone through a sales process with many prospective bidders and narrowed it to a few that were "interesting." But discussions had not reached a conclusion, he added. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Much hyped health plans lead some to cut care-study By Kim Dixon - CHICAGO, Dec 7 (Reuters) - People with high-deductible health plans designed to raise awareness of costs and reduce unnecessary care are causing consumers to scrimp on health care, according to a study released on Thursday. The plans charge higher deductibles in exchange for lower premiums and cheaper preventive services to cut overall health care costs. They also offer a tax-deferred savings account that can be used for care. But they have failed to attract the uninsured more than traditional health care plans, the study found, and people who were in the plans were more likely to cut back on basic care like prescriptions or doctor visits. The survey of 3,158 adults was conducted by the Employee Benefits Research Institute, a private nonprofit group funded by large employers, and the nonprofit research group Commonwealth Fund. "Employers are interested in the long-term prospects of (the plans for) cost control, but they await evidence of actual effects on costs," said Karen Davis, president of Commonwealth Fund. "They are not attracting large numbers of adults without insurance." Critics say the plans attract the healthiest individuals and leave sicker people in the wider insurance pool, which will raise overall health care costs. They also say the plans, which typically have a deductible of about $1000, are too expensive for the poor and uninsured. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Insurance broker Willis sees China growth By George Chen - Interview - SHANGHAI (Reuters) - Willis Group Holdings Ltd. (WSH.N: ), the world's third largest insurance broker, expects China to become its biggest business in Asia in the next three years, thanks in part to its recent victory in winning two important local contracts. London-based Willis recently won the contract to provide insurance brokerage and risk management services for the World Expo 2010 to be held in Shanghai, China's financial hub. And its French partner, Gras Savoye, in which Willis is the largest single shareholder with a 37 percent stake, won a contract for the Beijing Olympics 2010, said Sarah Turvill, global chairwoman of Willis. "China is a new market for all the (insurance) brokers here. It takes some time for clients to realize the value of brokers," Turvill told Reuters in an interview late on Thursday at Willis' Shanghai office. "But we are very confident and my expectation is that China will become the biggest business in Asia, regarding revenue for Willis, in three years' time," she said, after visiting clients in eastern China. Turvill expects growth of 40 percent in Willis' China revenue this year, though she declined to provide a figure, which she said was still small in the nascent insurance brokerage market. Willis increased its stake in Shanghai-based Willis Pudong Insurance Brokers Co., a joint venture established in 2004, to 51 percent from 50 percent last year after Beijing lifted an investment cap, making it the first foreign-controlled insurance broker in China. Despite the foreign control, only two or three of the joint venture's 180 staff are foreigners, while most senior management roles, including the chief executive post, are taken by Chinese nationals. Willis operates branches in 20 Chinese cities and provinces through its joint venture, Willis Pudong, and plans to open five more branches in China in the next three to five years, said Roger Wilkinson, its managing director for Asia business. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Willis Group to buy back 3.8 mln shares from Lehman unit Thu Nov 16, 2006 5:07pm ET – (Reuters) - Willis Group Holdings Ltd. (WSH.N: ) agreed to buy back about 3.8 million shares of its common stock from a Lehman Brothers unit at an initial price of $150 million. The repurchased shares would be price adjusted based on their volume weighted average market price during the term of the buyback program, the insurance broker said in a statement on Thursday. (Reporting by Kuncheria Cholemkeril in Bangalore) © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. U.S. Commercial Lines Insurers' Results To Decline Slightly In 2007, Article Says NEW YORK Dec. 5, 2006--Standard & Poor's Ratings Services is maintaining its stable outlook on the U.S. commercial lines sector, according to an article published today. The article, which is titled "U.S. Commercial Lines 2007 Outlook: Insurers Heading For A Soft Landing," says that this means we expect the number of upgrades and downgrades over the next six to 12 months to be fairly balanced, with neither one outpacing the other. This decision is supported by the fact that since early this year, ratings changes have been modest, with an even split between upgrades and downgrades (five of each). The number of stable outlooks also increased substantially. (More positive or negative outlooks would have presaged near-term ratings changes.) This trend has been in force since June 2005, when the sector outlook was revised to stable from negative. www.ratingsdirect.com www.standardandpoors.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
11. Revised Insurance Capital Adequacy Credit Risk Measures Explained NEW YORK Dec. 4, 2006—Standard & Poor's Ratings Services has published an addendum to the proposed revision in its risk-based insurance capital model, titled, "Revised Insurance Capital Adequacy Credit Risk Measures." Credit losses experienced by insurance companies and their subsidiaries are largely a result of credit defaults, rating transitions, and systemic credit spread movements. The source of these credit risks at insurance companies can include fixed income assets, credit derivatives, commercial mortgages, and counterparty credit exposure resulting from reinsurance contracts and over-the-counter (OTC) derivative contracts. "Our revised factors for credit risk largely target credit losses relating to default risk, but we will now apply the factors to all the major sources of credit default risk, some of which may have been ignored in the past (e.g. credit default swaps)," noted Standard & Poor's credit analyst Bob Roseman. "Because losses on exposure relating to systemic credit spread movements are largely related to asset-liability risks, this exposure will be captured in our factors for risk relating to asset-liability mismatches." Based on our research on the potential economic impact of ratings transitions on insurance company portfolios, Standard & Poor's decided the magnitude of this risk did not warrant separate specific risk factors. www.ratingsdirect.com www.standardandpoors.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. U.S. Life Insurers Enjoy Stable Outlook, Face Increased Competition And Riskier Returns NEW YORK Dec. 5, 2006--The next 12 months present challenges for the U.S. life insurance sector, including a flat yield curve, M&A activity, and a weak traditional sales environment that should be exacerbated by an increasingly complex product array, according to a report released today by Standard & Poor's Ratings Services. Nevertheless, Standard & Poor's believes the life insurance industry remains resilient due to its improved overall expense structure, enhanced enterprise risk management capabilities, and response to product needs in the ever-changing retirement market. The article, titled "U.S. Life Insurance Outlook 2007: Moderate Growth Leading To Aggressive Product Design," states that the outlook on the U.S. life insurance sector remains stable, with positive and negative rating movements over the next six to 12 months expected to be about equal, generally reflecting company-specific circumstances rather than macroeconomic or industry-wide factors. www.ratingsdirect.com www.standardandpoors.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. CIGNA Reaches Agreement in a 2002 Securities Class Action Suit PHILADELPHIA, Dec. 8, 2006 /PRNewswire-FirstCall/ -- CIGNA announced today that it has reached an agreement to resolve claims filed in federal court against the company and certain of its officers in 2002 on behalf of a class of CIGNA shareholders. The settlement, which specifies $93 million to be paid to the plaintiffs and their attorneys, is subject to a definitive written agreement by the parties and approval by the U.S. District Court for the Eastern District of Pennsylvania. The settlement is also dependent upon a certain level of class participation. A fairness hearing before the Court is expected to be held in April 2007 with final approval expected shortly thereafter. "CIGNA agreed to reach this settlement in order to avoid the time and expense involved in proceeding to trial. It is important to note that, under the terms of the settlement, CIGNA does not admit to any wrongdoing by the company or its officers," said CIGNA General Counsel Carol Ann Petren. In connection with the agreement, CIGNA Corporation will take a non-recurring charge in the fourth quarter of 2006 of approximately $25 million after tax. The estimated charge includes certain costs to defend and is net of expected insurance recoveries. www.cigna.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Independent Bank Corporation Announces Execution of a Definitive Agreement to Sell Its Insurance Premium Finance Business But Will Retain Its Warranty Payment Plan Business IONIA, Mich., Dec. 7 /PRNewswire-FirstCall/ -- Independent Bank Corporation (Nasdaq: IBCP), a Michigan-based bank holding company ("IBC" or the "Company"), reported that its subsidiary, Mepco Insurance Premium Financing, Inc. ("Mepco"), has executed a definitive agreement to sell substantially all of its assets related to the insurance premium finance business to Premium Financing Specialists, Inc. ("PFS"). Mepco will continue to own and operate its warranty payment plan business.PFS was founded in 1977 and is the fourth largest insurance premium finance company in the U.S. based on premium dollars financed and is the largest such company in the U.S. based on number of units financed. PFS is headquartered in Kansas City, Missouri. www.ibcp.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Ignagni: Setting the Record Straight on Consumer Directed Health Plans WASHINGTON, Dec. 7 /PRNewswire/ -- Recent studies on consumer directed health plans (CDHPs), including a new study released today by Commonwealth Fund and the Employee Benefit Research Institute (EBRI), do not reflect all of the available data on the value of CDHPs in the health care marketplace. Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), issued the following statement: "Consumer directed health plans are providing consumers -- some of whom were previously uninsured -- with an affordable health care coverage option. Small businesses who did not previously offer coverage and uninsured consumers in the individual market now have affordable health care coverage thanks to the availability of high deductible plans combined with Health Savings Accounts (HSAs). An AHIP census of the entire HSA marketplace earlier this year found that 33 percent of small firms offering a HSA-eligible plan did not previously offer health insurance coverage to their workers and 37 percent of those purchasing coverage in the individual market were previously uninsured. "Moreover, the CDHP marketplace is fast evolving to meet the needs of consumers. According to the annual KFF/HRET Employer Health Benefit Survey 2006, 82 percent of workers enrolled in HSA-eligible plans are in a plan that offers preventive benefits prior to any deductible. And authors of other research sponsored by the Commonwealth Fund in the July/August 2006 issue of Health Affairs concluded that HSA-eligible plans will not raise out-of-pocket costs for most users, and may, in fact, result in significantly lower out-of- pocket costs for many consumers with serious medical conditions as a direct result of the out-of-pocket maximums in the legislation that led to their creation in 2003. "HSA and HRA products are a part of the suite of products now being made available to millions of Americans, allowing consumers to choose the product that best meets their health care coverage needs. Providing consumers with better information about the cost and quality of health care services will help them make cost-effective and quality conscious health care choices, which, in the long-term, will lead to improved health care quality and lower costs for all. "We look forward to working with legislators and regulators at the federal and state level to ensure consumers have access to affordable, high quality health care coverage options." America's Health Insurance Plans -- Providing Health Benefits to More Than 200 Million Americans Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Evolving Complex Exposures Leave Individuals at Risk - Chubb Calls for the Integration of Holistic Risk Management and Wealth Management WARREN, NJ, Dec. 7 /PRNewswire-FirstCall/ -- Evolving complex personal and lifestyle exposures have increased the need for financial advisers to devote more time to helping manage their clients' risk, according to a white paper developed by the Chubb Group of Insurance Companies. Published in the current issue of The Journal of Wealth Management, "Managing Personal Risk in an Era of Rising Wealth and Proliferating Threats" addresses the evolving risk profile of affluent individuals and the increasing need for the financial planning community to integrate risk management into the wealth management process. "The world is changing. Globalization, technology advancement and rising litigiousness are creating a web of costly exposures that can jeopardize any client's financial plan," writes Eric Pruss, senior vice president of Chubb & Son and strategic marketing officer for Chubb Personal Insurance. "As a result, financial planners must address their client's personal property and liability exposure, and insurance coverage. Developing a holistic personal risk management program that complements and enhances an individual's financial plans will nurture and protect personal assets, health and security." According to the white paper, to effectively incorporate a risk-management approach into wealth-management programs, financial planners need to consider a broader range of client risks. The paper suggests planners:
Financial advisers are reacting positively to the white paper's publication. "When it comes to asset protection, there can be a large gap if advisers don't thoroughly review all the types and levels of coverage their clients have," says David Bibicoff,* a financial adviser in White Plans, NY. "Wealthy people want to make sure that they don't lose their wealth. A disconnect can exist between clients who want to be sure they don't lose their house and advisers who are focused on asset management." Additionally, as clients' asset bases often increase with age, many people neglect to adjust their liability coverage limits accordingly, which can expose a substantial portion of their wealth to loss over time. While liability limits are commonly addressed by financial advisers, risk exposures often extend beyond those related to standard liability coverage. "The risk management approach will enable financial planners to add value to their client relationships," writes Pruss. "More importantly, it will help protect the very assets that planners and other wealth managers have helped their clients to amass." A copy of "Managing Personal Risk in an Era of Rising Wealth and Proliferating Threats" can be obtained by emailing your name, firm and address to personalinsurance@chubb.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Life Insurance Finance Association Conference Reinforces Industry Support for Consumer Rights Overflowing Crowd Actively Participates in Discussions on Industry Regulation NEW YORK--(BUSINESS WIRE)--At the first Life Insurance Finance Association conference, held Wednesday, Nov. 29, participants reinforced the importance of reasonable regulation of the life insurance premium-finance industry to protect consumer rights. “There was overwhelming interest by all segments of the life-insurance industry in the conference and by the time everyone arrived there was standing room only,” said Scott Cipinko, executive director, Life Insurance Finance Association. “Premium finance is a prominent topic that garners substantial interest, and our dynamic panel of speakers, including Louisiana Insurance Commissioner Hon. Jim Donelon and Hon. Gregory Serio, former superintendent of the New York State Insurance Department, covered reasonable industry regulation, the proposed draconian five-year prohibition on the sale of a policy and protection of consumer rights.” The Life Insurance Finance Association and most attendees expressed their concerns about the sale of stranger-initiated life insurance transactions that insurance regulators seek to stop by imposing a five-year ban on the re-sale of life insurance policies in the secondary market. The ban falls short of addressing the real concern of violations of insurable interest in stranger-initiated life insurance transactions and merely recharacterizes them as regulated life settlements. However, it was made clear these transactions have mutated, now relying on the moving of the ownership of trusts that own life-insurance policies used to evade the reach of the NAIC Viatical Settlements Model Act; therefore, the problem will not be resolved by the passing of such a five-year ban. The Life Insurance Finance Association is currently working on this issue with regulators to try to design a way to deal with stranger-initiated life insurance without endangering consumer rights, added Cipinko. Legal experts agreed that the proposed five-year prohibition on the sale of a life insurance policy would be ineffective in fighting the sale of stranger-initiated life insurance. The experts also concluded the five-year ban will hurt consumers seeking to sell traditionally owned policies as well as policies financed through premium-finance loans which do not bear the characteristics of stranger-initiated life insurance after the standard two-year contestability period for estate planning purposes. “Industry events like these help promote the reasonable regulation of the premium-finance industry by bringing all sides together openly to discuss hot-button issues,” said Cipinko. “The magnitude of interest in the conference signifies a substantial hunger for an industry voice, which is why the Life Insurance Finance Association will continue to host more events like this conference.” For information of this year’s Life Insurance Finance Association conference – sponsored by Wells Fargo; Lord, Bissell & Brook, LLP; and O’Melveny & Meyers, LLP – and upcoming events, visit www.lifaorg.org. For more information about becoming a member of the Life Insurance Finance Association, contact Cipinko at 678-858-4001 or scipinko@lifaorg.org. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. RAM Holdings Ltd. Announces Pricing of its $75 Million Non-Cumulative Preference Share Offering HAMILTON, Bermuda--(BUSINESS WIRE)--RAM Holdings Ltd. (Nasdaq:RAMR) announced today that it has agreed to sell $75 million of its 7.5% non-cumulative preference shares with a liquidation preference of $1,000 per preference share to qualified institutional buyers in private transactions. The Company also has granted certain customary exchange and shelf registration rights to purchasers under the terms of the preference shares. The offering is expected to close on December 14, 2006 and will result in net proceeds to RAM Holdings Ltd. of approximately $73.5 million. RAM Holdings Ltd. will contribute the net proceeds to its insurance subsidiary, RAM Reinsurance Company Ltd., in order to increase its underwriting capacity. www.ramre.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Assured Guaranty Ltd. Announces Agreement to Repurchase Shares from ACE Limited HAMILTON, Bermuda--(BUSINESS WIRE)--Assured Guaranty Ltd. (NYSE:AGO) (“Assured Guaranty” or the “Company”) has announced that its subsidiary, Assured Guaranty US Holdings Inc., has entered into an agreement with a subsidiary of ACE Limited (“ACE”) to purchase 5,692,599 of Assured Guaranty’s common shares for $150 million. This share purchase would reduce ACE’s ownership of Assured Guaranty’s common shares to 20,307,401, or approximately 30% of the Company’s total common shares outstanding. The purchase of these shares will be funded by, and is contingent upon, Assured Guaranty US Holdings Inc.’s raising of $150 million of junior subordinated indebtedness. www.assuredguaranty.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. Prudential Financial, Inc. Announces $2.0 Billion Offering of Convertible Debt NEWARK, N.J.--(BUSINESS WIRE)--Prudential Financial, Inc. (NYSE:PRU) today announced the offering of $2.0 billion aggregate principal amount of convertible senior notes due 2036 pursuant to Rule 144A under the Securities Act of 1933, as amended. Prudential Financial has granted the initial purchaser of the convertible notes an overallotment option to purchase up to an additional $300 million aggregate principal amount of the convertible notes. www.investor.prudential.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Erie Indemnity Executive Enters Into Stock Trading Plan ERIE, Pa., Dec. 8 /PRNewswire-FirstCall/ -- Erie Indemnity Company (Nasdaq: ERIE) announced today that Douglas F. Ziegler, senior vice president and chief investment officer, has adopted a pre-set trading plan in accordance with Rule 10b5-1 of the Securities and Exchange Act of 1934. Rule 10b5-1 allows corporate insiders to enter into pre-arranged stock trading plans when they are not in possession of material non-public information about their company. Mr. Ziegler adopted the plan on December 8, 2006, during an open window period for the purchase and sale of company securities by officers. The plan requires a 30-day waiting period following adoption before securities may be sold. Mr. Ziegler's plan will cover stock he acquired over many years during his 18-year tenure with the company. The plan is intended to further Mr. Ziegler's ongoing asset diversification and estate planning goals. Mr. Ziegler intends to continue to hold and acquire shares in ERIE common stock. www.erieinsurance.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. TURBULENT ENVIRONMENT CAUSES SHOCK AND DISRUPTION IN ORGANIZATIONS Agility and Resilience Key to Successfully Managing Through Change ST. PETERSBURG, FL (December 7, 2006) – If you think the pace and disruptiveness of change is increasing around you, you’re likely right. In a recently released study by the Institute for Corporate Productivity (i4cp, formerly the Human Resource Institute) almost half of the participating organizations said that the pace of change and the disruptiveness of change had increased so dramatically that it was almost impossible to predict the future. The study – titled Agility and Resiliency – was commissioned by the American Management Association in order to assess organizations’ perception of pace, disruption, shock and turbulence in the workplace and their ability to successfully manage through change. i4cp received more than 1,400 responses to the survey, which was sent out to organizations around the globe. A full 37% of respondents went so far as to report that they had experienced more to many more shocks and surprises than they had in the previous five years, while 39% said that the pace of change was faster but still predictable. Of those organizations experiencing disruptions, 40% had experienced a shock or surprise within the past year alone so severe that it disrupted their core operations, business strategy or mission and even threatened viability. “The view that environmental turbulence is increasing appears accurate,” according to Joseph McCann and John Selsky, both business professors and lead academic researchers for the i4cp study. “Events such as 9/11 certainly focused attention on the potential for disruption, but the scale of impact is beyond expectation, not just in the U.S. but globally and across a wide range of organizations.” The study also explores how well individuals, teams, organizations, and industries are managing such change, in particular what they are doing to build their agility and resilience. Key findings illustrated that organizational performance – measured by profitability, market share, and competitiveness – is strongly related to a company’s agility and resilience. “The highest-performing organizations were those that were most positive about change, able to move quickly and able to ‘take a hit’ and respond well,” said Mark Vickers, i4cp’s Senior Research Analyst. ”If individuals and organizations are going to manage change in today’s environments, they have to be both agile and resilient. Investing in those capacities will be essential for sustaining performance, based upon what this study reveals.” For more information about this study, contact Greg Pernula at (727) 345-2226. www.i4cp.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Markel Corporation Launches New Office of Business Development Richmond, VA – December 7, 2006 – Effective January 1, 2007, Markel Corporation will launch the Office of Business Development, a new division dedicated to generating growth within the Markel Group of companies. The Office of Business Development will be comprised of Letha Heaton, currently senior vice president Marketing at Shand Morahan & Company, Inc.; Brenda Phillips, currently vice president with Shand; and Jeff Lamb, most recently chief underwriting officer at Markel Underwriting Managers, Inc. This new team will coordinate and support current business development activities and explore new opportunities within Markel’s nine subsidiary companies.* There will be an emphasis on acquisitions, product enhancement, and new product development. www.markelcorp.com *The Markel Corp. group of companies: Essex Insurance Company, Markel Underwriting Managers, Inc. (MUM), Markel Insurance Company (MIC), Markel American Insurance Company (MAIC), Markel Southwest Underwriters (MSU), Markel Re, Markel Global Marine & Energy, Markel International (MINT) and Shand Morahan & Co., Inc. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. Foresters announces major shift in U.S. sales organization - Foresters Financial Partners goes independent Toronto, Canada, November 30, 2006 - The Independent Order of Foresters, commonly known as Foresters, today announced that it will launch a new sales organization in January 2007 to sell its life insurance products and annuities in the United States. This network of independent agencies will be known as Foresters Financial Partners Inc. with offices across the U.S. Foresters will provide the new sales organization marketing support and financial incentives that will enable Foresters Financial Partners to attract independent producers with the opportunity to be financially successful and grow their own business. Through Foresters Financial Partners and its extensive sales force, Foresters products will be available to a much larger customer base. www.foresters.biz Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. LAWMAKERS PLEDGE TO PURSUE DISCLOSURE OF INSURANCE DATA ON FLOODED, TOTALED, STOLEN VEHICLES IN NEXT CONGRESS WASHINGTON – Led by Senator Trent Lott, R-MS, Rep. Cliff Stearns, R-FL, and other Congressional leaders, the National Automobile Dealers Association (NADA) and a growing coalition pledged to continue their efforts to pass total-loss disclosure legislation when the new Congress convenes in January. Lott said in today’s press conference that he plans to reintroduce legislation in the 110th Congress to reduce title fraud and title washing of insurance-totaled vehicles. In addition to today’s Congressional pledge, NADA released a letter signed by a coalition of organizations that collectively represent millions of jobs in the automotive industry nationwide, pledging their support for passage of total-loss disclosure legislation. Since the Gulf Hurricanes of 2005, NADA has led the public effort to flag these extremely damaged cars. “The goal of this legislation is simple – if a vehicle is totaled, the VIN should be disclosed to the public,” Regan added. “Armed with total-loss information, consumers, businesses, dealers, auto auctions – anyone buying used cars – should be able to easily identify one of these rebuilt wrecks, even if the title was washed. This legislation is necessary to red-flag the total-loss history of a used car forever.” www.nada.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. DMVs Offer Solution to Protect Consumers from Damaged Vehicles Nationwide System Already Exists ARLINGTON, Va., Dec. 8 /U.S. Newswire/ -- The American Association of Motor Vehicle Administrators (AAMVA), a nonprofit association representing state motor vehicle agencies, applauds members of Congress who yesterday called for legislation that will protect car buyers and highway travelers from unsafe cars totaled by Hurricane Katrina and other natural disasters. AAMVA urges lawmakers to coordinate efforts with the existing National Motor Vehicle Title Information System (NMVTIS), which is operating in 29 states. www.aamva.org http://www.usnewswire.com/ /© 2006 U.S. Newswire 202-347-2770/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. Enterprise Risk Management Calls On Actuaries To Assume Broader Role Of Risk Manager, CAS Is Told SAN FRANCISCO – The development and implementation of Enterprise Risk Management (ERM) requires actuaries to assume the role of strategic risk managers in instituting what is essentially a cultural change in a company’s operations, actuaries were told at the Casualty Actuarial Society annual meeting here. Calling ERM “explicit, organized decision-making under uncertainty,” Thomas Hettinger, managing director, EMB America, LLC, explained that ERM is a process of identifying risk, assessing risk, transferring risk, and capitalizing on risk. He observed that “many firms are already doing this by default, but not in a manner where people can study it or critique it.” Actuaries have the tools to help develop the ERM process, but it requires actuaries to perform as risk managers, looking forward to all the risks that could be encountered in the future. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. Enrolled Actuaries, Certified Pension Consultants Can Now Join FSP Newtown Square, PA – The Society of Financial Service Professionals (FSP) has expanded its membership eligibility criteria to include two additional designations: Enrolled Actuaries (EA) and Certified Pension Consultants (CPC). Professionals with these credentials can now take advantage of the many educational, networking and ethics programs offered by FSP. According to Rich Linsday, CLU, ChFC, RFC, AEP, president of the Society of FSP, the decision to add these designations was based upon the recommendations of a task force formed to evaluate credentials in the pension and actuarial fields. “As the premier multidisciplinary organization in the financial services arena, we’re continually seeking to add value for our members,” he said. “By expanding our eligibility criteria, we create new opportunities for our members to create profitable professional alliances with their fellow members.” Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 30. ACTUARIES’ EXPERIENCE WITH PAST EXPOSURES HAS PREPARED THEM FOR NEW, EMERGING RISKS SAN FRANCISCO – Actuaries should draw on the lessons learned from the notorious exposures of asbestos and pollution to be better prepared to handle new emerging risks like nanotechnology and the avian flu, attendees at the CAS Annual Meeting were told. Harrison Oellrich, managing director with Guy Carpenter, told attendees that nanotechnology is an example of an emerging exposure with enormous potential benefits as well as risks. He explained that according to the United States’ National Nanotechnology Initiative (NNI), “nanotechnology is the understanding and control of matter at dimensions of roughly 1 to 100 nanometers, where unique phenomena enable novel applications.” Oellrich cited estimates that 15 percent of global manufacturing worldwide could be made by nanotechnology by 2014. “In the research area, the National Nanotechnology Initiative (NNI) estimates federal spending for nanotechnology R&D at already nearly $1 billion,” he said. Currently around 200 consumer products on the market incorporate nanomaterials, from sun-tan lotions to stain-resistant clothing to tennis racquets, Oellrich noted. “These undeniable benefits are accompanied by risks, some known and some unknown. We need to be thinking about them so they don’t catch us as an industry unawares,” he said. While it is still in doubt whether nanotechnology will be revolutionary, Oellrich urged insurers and reinsurers as enablers of new technologies to better understand the technology and processes underlying this emerging exposure. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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