Daily Quote: "Truth and roses have thorns about them" - - H. G. Bohn 1. AIR Worldwide Estimates Pacific Northwest Winter Storm May Cause Insured Losses in Excess of Half a Billion Dollars in the U.S. BOSTON, Dec. 19, 2006 – Catastrophe risk modeling company AIR Worldwide Corporation estimates U.S. insured losses from the Pacific Northwest winter storm could exceed half a billion dollars in the U.S. Wind gusts of more than 90 mph were widely reported across Oregon and Washington and heavy precipitation caused localized flash flooding in western Washington and blizzard conditions in the eastern part of the state. “This was the worst wind storm to strike the Pacific Northwest since the 1993 Inauguration Day storm,” said Peter Dailey, director of atmospheric science for research and modeling at AIR Worldwide. “The wind speeds observed from last week’s storm were similar or a bit higher than those of the 1993 storm but were more widespread, extending south to Oregon and east to Montana, so total damage is likely to be higher.” The Pacific Northwest winter storm struck late last week causing damage to roofs, cladding and windows. More significant structural damage occurred as a result of downed trees and utility poles. On Saturday December 16th, Washington Governor Christine Gregoire declared a state of emergency for all 39 counties. More than a quarter of a million remained without power as late as Sunday, including several thousand in northern Idaho and Montana. Using its U.S. Winter Storm model the AIR estimate includes insured losses from damage due to wind, precipitation, and cold temperatures. Like most winter storms in the Pacific Northwest, damage from the December 14-15 storm was caused primarily by wind. Heavy snow and the coldest temperatures were confined to the interior mountainous regions with lower property exposure. www.air-worldwide.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Insurance Commissioner John Garamendi Releases "Best Practices" Report for Annuity Sales Guide For Insurance Industry Aimed At Curbing Financial Abuse Of Seniors And Highlighting Best Practices Within The Industry SACRAMENTO – Taking aim at preventing financial abuse of senior citizens, California Insurance Commissioner Garamendi is releasing a report detailing best practices in annuity sales. Titled “A Suitable Match: Best Practices for Annuity Sales,” the report focuses on practices that both insurers and producers can adopt to increase the certainty that customers are purchasing annuities that are well-matched to their financial goals. “Inappropriate sales of annuities to seniors has been particularly troubling, with sales agents reaping huge commissions and elderly customers being fleeced,” said Garamendi. “Over the past year, I’ve asked my staff to raise the level of scrutiny of annuity sales, conduct market examinations and enforcement actions to ensure that annuity sales are not made based on misrepresentations and that protective practices mandated by law for seniors are always followed.” The report encourages every insurer selling annuities to
It is the role of the Department not only to penalize insurers and producers for bad conduct, but to offer guidance on “best practices” within the industry. The California Department of Insurance (CDI) has reviewed hundreds of pages of materials to cull the best annuity sales practices of the life insurance industry. CDI is offering this report to encourage those selling annuities to learn from the best practices of their colleagues all across the country. “A Suitable Match: Best Practices for Annuity Sales” is available by visiting the CDI website at www.insurance.ca.gov and choosing “Senior Issues.” A MESSAGE FROM INSURANCE COMMISSIONER JOHN GARAMENDI In the past year, I have had the opportunity to travel extensively throughout the state, hearing from Californians about issues close to their hearts and of importance to their pocketbooks. In an era when even Social Security may no longer be a certainty, many Californians – particularly our seniors – have told me that they are seeking to safeguard their financial futures. The insurance industry provides at least one financial vehicle for these seekers – annuities. Annuities are excellent products for insurers since most annuities require no individual underwriting. Annuities are also excellent products for agents and brokers, as they are easily marketed as a guarantee of adequate income for life and often are accompanied by high commissions. Annuities can also be excellent investments for consumers who understand the risks and the benefits of these oftentimes complicated products. Unfortunately, far too many consumers are being sold annuities that are not suitable for their financial circumstances. In statehouses across the country, at the National Association of Insurance Commissioners, at the National Association of Securities Dealers, and within insurance trade associations, “suitability standards” have been recognized as the foundation of an annuity sale that will provide financial shelter for the consumer, and prevent the collapse of a house of cards. Over the past year, I have asked my staff here at the Department of Insurance to raise the level of scrutiny given to the suitability of annuity sales, particularly to seniors. Through market conduct examinations and enforcement actions, the Department is using a “stick” to ensure that annuity sales are not made based on misrepresentations, and that protective practices mandated by statute for seniors are always followed. The role of the Department is not only to penalize insurers and producers for bad conduct but to offer guidance on “best practices” within the industry. This report presents an array of current industry “best practices” related to the sale of annuities, as well as collecting the statutory mandates governing such sales. My staff has reviewed hundreds of pages of insurer materials to cull the best annuity sales practices of the life insurance industry. Together, my staff and I offer this report to the life industry to encourage those selling annuities to learn from the best practices of their colleagues. I am convinced that the best method of ensuring that customers are purchasing only annuities that are well-matched to their financial goals and financial circumstances is for the insurer, not just the producer, to review every sale. While more costly, this procedure balances the desire of insurers and producers to market a lucrative product with necessary protection for consumers. After all, it is not the producer but the insurer that will be entering into the contract with the insured. It is the insurer that may find itself in a lawsuit when a customer discovers that, contrary to his understanding, he cannot access his own money without paying a large penalty taken out of principal. It is the insurer that will suffer from the bad publicity arising from unsuitable sales. If insurers follow the best practices discussed in this report, the chances are that the promise of an annuity – that the purchaser has found a financially suitable match – will be kept. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. UnitedHealth sees 2007 revenue about $79.5 bln Tue Dec 19, 2006 11:10am ET - By Lewis Krauskopf - NEW YORK (Reuters) - UnitedHealth Group Inc. (UNH.N: ), which is trying to emerge from a stock options scandal, on Tuesday forecast better-than-expected 2007 revenue and a rise in net earnings next year of about 14 percent. The health insurer, which also affirmed its 2006 profit outlook as it met with analysts, forecast 2007 revenue of about $79.5 billion. That forecast exceeded the $77.9 billion in revenue expected by analysts, according to Reuters Estimates. UnitedHealth, whose shares rose 2.3 percent, is targeting enrollment growth next year across its health plans, including in its Medicare plans. The company projected 2007 net earnings of $4.7 billion to $4.75 billion. Analysts expect 2007 GAAP net profit of $4.71 billion and earnings excluding one-time items of $4.73 billion. "Management's 2007 guidance is more or less in line with consensus," Bank of America analyst Joseph France said in a research note. UnitedHealth's outlook for 2006 and 2007 includes its estimated range of noncash charges for stock-based compensation expense arising from the review of its stock option practices. The top U.S. health insurer by market value also said it had largely completed its analysis of adjustments to past financial statements related to stock-based compensation expense, and had requested consultation on certain issues with the U.S. Securities and Exchange Commission. UnitedHealth planned to review these issues with the SEC before completing its restatement and filing quarterly reports for its second and third quarters of this year. The company gave its forecasts as it held its first major review of its business for analysts since former Chief Executive William McGuire left in the wake of a damaging report in October that found evidence of backdated stock options. "It was embarrassing and we regret it," new CEO Stephen Hemsley said of the options scandal at the outset of the meeting, which was broadcast over the Internet. For the years 1994-2005, the company estimated charges from stock-based compensation at $400 million to $600 million under one accounting method that it currently uses; or charges of $1.5 billion to $1.7 billion, under a second accounting method it had previously used. "We think the quantification is another step toward moving the stock options scandal behind it, and resuming its share repurchases next year," France said. UnitedHealth cautioned the estimates have not been audited and are subject to change depending on its consultation with the SEC. "We will review our analysis and proposed restatement adjustments with the SEC and return to current filing status as quickly as possible," G. Mike Mikan, the company's chief financial officer, said in a statement. The Minneapolis-based company previously had warned that financial statements dating to 1994 should no longer be relied upon. The company affirmed its previous outlook for 2006 net earnings of $4.14 billion to $4.16 billion, including fourth-quarter 2006 net earnings in the range of $1.17 billion to $1.19 billion. It forecast first-quarter net earnings of $980 million to $1 billion. For 2007, the company projected it would serve 30 million medical members, a term generally used to describe people enrolled in plans that offer broad health benefits. It said its medical care ratio -- a key industry barometer that measures medical costs as a percentage of premium revenues -- would worsen slightly to 81.5 percent, owed to a greater portion of business coming from its Medicare and Medicaid health plans. However, the company projected its operating cost ratio would improve. UnitedHealth shares rose $1.18 to $51.58 in morning trade on the New York Stock Exchange. They remain down about 17 percent this year. © Reuters 2006. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Life Insurance Finance Association Will Not Support NAIC Viatical Law LIFA Believes Model Act is Harmful to Consumer Rights; Calls on NAIC to Withdraw and Re-draft Act SAN ANTONIO--(BUSINESS WIRE)--The Life Insurance Finance Association (LIFA) today issued the following statement regarding the NAIC Viatical Settlements Model Act: The Life Insurance Annuities (A) Committee of the National Association of Insurance Commissioners (NAIC) missed the mark this weekend when it voted out of committee a draft of amendments to the NAIC Viatical Settlements Model Act (the “Model Act”), which are harmful to consumer rights and do little to prevent the abuses which they were purportedly drafted to address. The original intention of the committee and its chairman, North Dakota insurance commissioner Jim Poolman, was to prohibit the sale of Stranger-Initiated Life Insurance (SILI), also referred to as Stranger-Owned Life Insurance (STOLI). SILI and STOLI-type transactions have raised serious concerns throughout the insurance industry in that they are often designed to manufacture life-insurance sales for the sole purpose of placing that insurance and its death benefits in the hands of disinterested third-party investors, in violation of most, if not all, insurable-interest laws throughout the country. The Life Insurance Finance Association (LIFA) has supported the efforts of the committee and commissioner Poolman to the extent that they seek to eliminate such abusive transactions. But, while LIFA believes premium-finance lenders must be subject to reasonable regulation, it also advocates strongly for the protection of consumer rights, and the amendments voted on by the committee do not adequately consider those essential rights. While there are a number of troublesome provisions in the proposed Model Act, the most blatantly offensive to consumer rights is the provision which prohibits the sale of a life-insurance policy in the secondary market for five years from the date of its issuance. The committee, ignoring testimony from consumer advocates, banking and premium finance professionals, has been misled into believing that by extending the current two-year ban on sales, somehow the abusive transactions represented by the SILI and STOLI deals will be undermined and eliminated. LIFA, whose point of view was echoed by legal experts and economists, believes that the five-year prohibition will do nothing to prevent abusive practices, but will have the detrimental effect of preventing certain consumers from selling their life-insurance policies and their personal property, even in the event of severe financial distress. A consumer that sought a certain type of premium financing will find himself or herself forced to lapse the policy or retire it for its minimal cash surrender value if he or she is unable to pay the premiums prior to the five year date. He or she will be prohibited from realizing its market value in the secondary market. This is antithetical to consumer protection, and at the same time fails to accomplish its intended purpose. LIFA advised the committee at the hearing that the SILI and STOLI marketers, having closely followed the committee’s proposed changes, have already adapted their practices such that these amendments will have no impact on their improper transactions. Since the marketers are prohibited from selling the policies, they have designed transactions that transfer ownership of trusts that hold policies, rather than the policies themselves. Not even a twenty-year ban on life-settlement sales would prevent these transactions. Further, the proposed amendments contain many drafting inconsistencies and, as presented, violate the National Bank and Gramm-Leach-Bliley Acts. Therefore, the law would be the subject of litigation if enacted and be struck down for vagueness and conflict with federal laws after adoption by any state. LIFA and others, including a former insurance commissioner, are urging the commissioners to hold the Model Act until a full-day drafting session can be utilized to fix its numerous legal and technical problems. The group also seeks testimony from consumers and those professionals involved in estate and financial planning to determine the real-world impact of this Model Act before voting to restrict the property rights of American citizens. LIFA Will Not Support NAIC Model Act LIFA and its members continue to support the commissioner’s work, but the work is not complete. The original NAIC Viatical Settlements Model Act was the subject of years of deliberation in order to capture the activities of the market at that time. This amended Model Act was the subject of only a few months’ deliberations. Many critical issues remain unresolved. Therefore, LIFA will not support this legislation in any state and calls upon the NAIC leadership to delay any vote on this Model Act until additional review is undertaken by the Office of Comptroller of the Currency (OCC) and industry professionals. LIFA also urges its life-insurance colleagues in the other trade associations and those that they represent to review the issues in connection with the movement of the ownership of a trust. Such programs may place undue financial hardships on insurance producers, while putting their license at risk. In addition, the Model Act, as it currently stands, will have the unintended impact of including the insured in a scheme such that they may unknowingly be aiding and abetting a fraud on the insurer. LIFA strongly believes this Model Act will actually embolden those that create these SILI programs by allowing a loophole to legalize the now illegal activity by sidestepping the issue of insurable interest. LIFA members promote the transparency of their methods and products to the insurance industry and are opposed to the SILI programs designed at circumventing the impact NAIC Model Act and state laws while hiding the true nature of these transactions from insurance carriers that issue SILI policies without accurate information. For more information regarding LIFA’s position on these issues, contact Scott Cipinko at 678/858-4001 or scipinko@lifaorg.org. www.lifaorg.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. Fitch Releases U.S. Insurance Broker 2006 Review & Outlook for 2007 CHICAGO--(BUSINESS WIRE)--Fitch Ratings today released its annual analysis of the U.S. insurance brokerage industry, commenting on the market's issues one year further removed from the turmoil created by industry investigations that commenced in late 2004. Fitch's Rating Outlook for the insurance broker industry is Stable. A Stable Outlook implies that Fitch would not expect ratings to change in the near term for the brokers in Fitch's ratings universe. 'The Rating Outlook reflects a belief that brokers have largely put the issues from recent regulatory investigations behind them,' said Greg Dickerson, Associate Director, Fitch Ratings. 'Although near-term profitability may not reach peak levels last seen in 2002 and 2003, Fitch expects the industry's cash flow to be more than sufficient to support debt-servicing requirements.' Fundamentally, Fitch believes that the insurance brokerage industry and specifically the larger broker firms that are in Fitch's rating universe continue to possess qualities that are consistent with investment grade ratings. 'The insurance brokers generally benefit from enduring franchises focused upon meeting the demand of insurance purchasers for policy placement and risk management services, and insurers' need for an effective product distribution source,' Dickerson continued. 'Additional strengths include: reasonable financial leverage in most instances and strong cash flow characteristics derived from the transaction oriented and non-capital intensive nature of the business, which promotes more flexible debt servicing capability.' While it is unlikely that industry profitability and operating margins will return to levels reported in the early 2000s, Fitch believes broker operating performance will improve significantly in 2006 as the litigation settlements and restructuring charges of 2005 have greatly diminished. Also, brokers are gradually adapting to the impact of margin contraction due to the elimination of contingent commissions and a softening rate environment. Fitch's review and outlook, 'Review and Outlook 2006-2007: Insurance Broker Industry' is available on the 2007 Outlook link on the front page of www.fitchratings.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 6. Venture Capitalists Bullish on 2007 WASHINGTON, Dec. 18 /PRNewswire/ -- Venture capitalists are predicting a strong and stable investment climate in 2007 with opportunities across a diverse group of industry sectors and global regions, according to a survey conducted by the National Venture Capital Association (NVCA). And while there is dissension as to whether the IPO market will open for venture-backed companies in 2007, there are strong indications that the venture capital community will be betting on alternative exit strategies for their portfolio companies in the coming year. The survey results also suggest that there will be fewer venture funds operating in 2007 as the technology bubble burst finally works its way through the system. "Alternatives will drive venture capitalists in 2007," said Mark Heesen, president of the NVCA. "This industry has built itself on finding alternative approaches to existing infrastructure issues. The 2006 investment momentum in sectors in need of or receptive to such changes, including energy, Internet and media/entertainment, will accelerate next year. Additionally, if the venture-backed IPO market in the U.S. doesn't begin to open in 2007, the VC industry will begin to leverage alternative markets and buyers for their portfolio companies. An industry-wide shift toward these new exits has the potential to fundamentally transform the venture capital business model." The NVCA survey was conducted in early December and includes the predictions of more than 200 venture capitalists from across the United States. For survey highlights and a compilation of NVCA member predictions on exits, investments and other venture-related forecasts, please contact Emily Mendell at emendell@nvca.org. http://www.nvca.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. LifeStrive® Corporate Wellness Consultants Provides A Health Maintenance And Promotion Program 12/16/06: PHOENIX, ARIZONA The growing trend of consumerism in health care has created a need for employees everywhere to obtain authentic, personalized direction and prioritization in the domain of health maintenance and promotion that is easily accessed, scalable and cost-effective. LifeStrive® Corporate Wellness Consultants now provides a health maintenance and promotion program with a lab benefit that fits this need. The features are: an Annual Wellness and Health Promotion Evaluation valued at over $630, plus all-year Discount Laboratory Services up to 70% off the retail lab price. Richard Perryman, Managing Partner for LifeStrive stated; “With access to this information and personalized direction, consumers can take charge of their health and prioritize their spending accordingly for an annual fee of $79.95 (individual) and $99.95 (family). This fee is reimbursable through Flex and HSA spending accounts. Now that we are creating consumers in health care…we need to enable and educate them as to what their health-related priorities should be. This program represents a clear step in that direction”. Annual Wellness and Health Promotion Evaluation Membership includes an annual no-cost wellness test valued at over $630, and includes:
Discount Laboratory Services Throughout the year, members will also have direct access to the major clinical labs at prices discounted up to 70% off the published “Patient Price” list. As you can see from the sample test prices below, savings can be substantial and in certain cases employees can recoup the annual lab benefit fee with savings from just one test… Perryman added; “the annual membership and lab fees are all reimbursable through Flex or HSA accounts, so net savings can be even greater and we offer discounts for employers that purchase memberships for all employees”. For more information contact Richard Perryman at (800) 670-0743 or rperryman@lifestrive.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Employer-Sponsored Healthcare Coverage Appears to Be Meeting Needs of U.S. Adults ROCHESTER, N.Y., Dec. 18 /PRNewswire/ -- The latest Wall Street Journal Online/Harris Interactive Health-Care Poll reveals that most adults with employer-sponsored health insurance feel very or somewhat confident that their coverage will meet their needs in the upcoming year (89%) and relatively few individuals expect to switch (6%) or drop (less than 0.5%) their current coverage next year. Furthermore, most individuals believe their out-of-pocket costs at the point of care - co-pays and deductibles - will remain about the same compared to this year (out-of-pocket for a doctor visit after the deductible 69% and out-of-pocket for prescription drugs after the deductible 68%). By comparison, adults with employer-sponsored health insurance are more likely to anticipate an increase in their monthly premiums (34%), though this group still represents a minority. These are some of the results of an online survey of 3,561 U.S. adults, ages 18 and older, conducted by Harris Interactive(R) between November 28 and 30, 2006 for The Wall Street Journal Online's Health Industry Edition (http://www.wsj.com/health). Savings accounts As costs have risen over the past decade, there has been an expansion in the market of accounts that can help individuals save for and cover their out- of-pocket costs for healthcare. These include flexible spending accounts, medical saving accounts, health reimbursement accounts and health savings accounts. Plans, employers and the Bush administration see these savings vehicles as an effective means of helping individuals manage their out-of- pocket costs for healthcare. These findings, however, show that few insured adults are taking advantage of these savings accounts:
There are surely many reasons why so many individuals do not enroll in these types of accounts. Not all employers offer them, individuals may not understand how they work, and many may not be able to afford to set aside funds on a routine basis. These findings also suggest that many people may not recognize the need for these kinds of savings vehicles as they remain confident that their health insurance coverage will meet their needs. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Improved BenefitsCeckU® Website Helps Seniors Quickly Find Benefits WASHINGTON, DC, December 19, 2006 – The National Council on Aging (NCOA) today announced the unveiling of a new, more user-friendly BenefitsCheckUp® Web site. BenefitsCheckUp is a free and confidential online service that helps seniors determine what benefits they qualify for and how to claim them. Developed and maintained by the NCOA, BenefitsCheckUp is the nation's most comprehensive Web-based service to screen for benefits programs primarily targeted to seniors with limited income and resources. Since 2001, close to 2 million people have used BenefitsCheckUp to find benefits programs that help them pay for prescription drugs, health care, rent, utilities, and other needs. It includes more than 1,400 public and private benefits programs from all 50 states and the District of Columbia. The upgraded BenefitsCheckUp Web site, http://www.BenefitsCheckUp.org, has more consistent navigation to help seniors, families and other users find what they are looking for faster and easier; including applying for Medicare Part D’s Extra Help, or finding and enrolling in other prescription savings programs as well as in many other Federal, state, local and private benefit programs. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. PAR Marks 20 Years of Delivering E&O Protection and Risk Management to Agents, Brokers Captive Founded by Broker Groups Amid ’80s Liability Crisis COLUMBUS, Ohio, USA (18 December 2006)—Professional Agencies Reinsurance (PAR), Ltd., a captive facility that provides comprehensive errors and omissions (E&O) coverage and expert risk-management counsel to larger agencies and brokers, is celebrating its landmark 20th anniversary. The specialty E&O captive was founded by Assurex Global and The Council of Insurance Agents & Brokers (CIAB) in the mid-1980s during the uncertainty wrought by that period’s liability availability and affordability crisis. Today, PAR provides E&O protection and risk-management expertise to more than 9,500 insurance professionals in more than 65 of the largest agency and brokerage firms in the U.S. “PAR has been a constant presence with and committed business partner to its participating agencies and firms for 20 years,” says Jim Hackbarth, president of both PAR Ltd. and Assurex Global. “Over those two decades we have grown and have become more sophisticated in our risk management techniques to meet the evolving E&O needs of our agencies and brokers. The excellent E&O results of our clients combined with our high customer retention rate—consistently at 90 percent—show that we have been and will continue to be indispensable business partners with our clients.” Ken A. Crerar, CIAB president, says, “PAR was borne out of the desire of participating agencies and brokers to better control liability costs and to improve management of their operations. It has done that and more.” About PAR: Professional Agencies Reinsurance, Ltd. (PAR) is an agents’ errors and omissions facility developed through the cooperative efforts of Assurex Global and The Council of Insurance Agents and Brokers. PAR is underwritten by Fireman’s Fund Insurance Company. The program insures roughly one-quarter of the 100 largest brokers of U.S. business. Since its founding in 1986, PAR has maintained a 90 percent retention rate. For more information: www.parltd.com. www.assurexglobal.com www.ciab.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. Congress Supports Long Term Care Through Expanded Health Savings Accounts Individuals and Businesses Can More Easily Afford Protection, Says Expert Amy Pollock of Atlanta Atlanta, GA, December 21 – Before adjourning on the 9th, Congress passed the Tax Relief and Health Care Act (H.R. 6111), which expands the sources and amounts that may be contributed to Health Savings Accounts (HSA's). This is good news for those seeking long term care protection but unsure how to finance it, according to Amy Pollock of LTC Financial Partners, the nation's most experienced long term care insurance brokerage. HSA's are tax-advantaged savings accounts restricted to health-related purposes. Funds may be withdrawn tax-free to pay for long term care (LTC) insurance, deductibles, co-insurance, and dental and vision care. Key provisions of the new law include --
"What this means," says Pollock, "is that millions of Americans will have a painless way to protect their wellbeing, lifestyles, and assets in case they encounter longer-lasting health problems." Those without an HSA may set one up through a bank, credit union, insurance company, or other approved organization. Employers may also set up plans for their employees. amy.pollock@ltcfp.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Michigan Is Soon To Become The 29th Member Of The Interstate Insurance Product Regulation Commission WASHINGTON, D.C. (Dec. 18, 2006) — Michigan is soon to become the 29th Member of the Interstate Insurance Product Regulation Commission (Commission), adding to the growing list of states to join the Insurance Compact. The Michigan Legislature adopted the Compact on Dec. 14. The bill now is on its way to Gov. Jennifer M. Granholm for action. Once the governor signs the Compact into law, Michigan officially would become the 29th state to become a Member of the Commission, increasing the nationwide premium volume in the Compact to 48 percent. Michigan also will join the Management Committee, bringing it up to its full complement of 14 members. www.insurancecompact.org. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Nearly Three Fourths Of Employees Polled Are Job Hunting HR Professionals Concerned About Resignations, Says New Poll from SHRM and CareerJournal.com (Alexandria, Va., December 19, 2006)— More than 75 percent of employees are looking for new jobs, according to the 462 employees and 367 HR professionals surveyed in the 2006 U.S. Job Retention Poll released today by the Society for Human Resource Management (SHRM) and The Wall Street Journal's CareerJournal.com. According to HR professionals, on average, 12 percent of their organizations' workforce had voluntarily resigned since the beginning of 2006. Non-management employees were the most likely to resign, according to 71 percent of the HR professionals surveyed. Seventy-three percent of HR professionals indicated that they were concerned about the voluntary resignations at their organizations. In an effort to retain employees, nearly 50 percent of the HR professionals reported that their organizations had implemented special retention processes. A greater proportion of organizations were implementing special retention processes in 2006 (49 percent) than in 2004 (35 percent). HR professionals have found that promoting qualified employees, offering competitive merit increases/salary adjustments, and providing career-development opportunities are among the best employee-retention strategies. Although salary increases often are perceived as the most valuable incentive for employees to stay with their current jobs, they also are among the most difficult to provide because although the economy is improving, organizations are still somewhat cautious to increase spending. "As the economy and job market continue to improve, employee retention poses a greater challenge for HR professionals," said Gail Griffin, general manager, CareerJournal.com. "The top three reasons people voluntarily leave their organizations are for better compensation elsewhere, career opportunity elsewhere, and dissatisfaction with the potential for career development." www.shrm.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. A.M. Best Special Report: Mutual Life Insurance Companies -- Staying the Course OLDWICK, N.J.--(BUSINESS WIRE)--In September 2002, A.M. Best Co. issued “Demutualizations: The State of Conversions in 2002.” Among the most critical findings was that the wave of mutual company conversions since the mid-1990s had subsided, and the remaining mutual life insurers had made conscious decisions to remain mutual. Four years later, the message has not changed, and the prognosis for well-run mutuals to thrive continues. A.M. Best’s meetings with mutual company management teams indicate that mutual life companies will retain their mutual status, with no major demutualizations on the near-term horizon. In this article, A.M. Best assesses the state of the mutual life marketplace, noting the bifurcation in the market between the remaining largest mutual life companies and the smaller mutual life companies. The issues faced by the smaller mutual insurers mirror—in many ways—the concerns faced by their similarly sized stock competitors. With a longer time horizon, mutuals are not driven by short-term profits or stock movements. It also can be said that mutual companies can focus their resources on their current customers (through participating dividends) rather than focusing primarily on acquiring new business—a concern of stock companies in order to generate ongoing growth of revenue. BestWeek subscribers can download a PDF copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Moody’s Corporation Acquires Wall Street Analytics NEW YORK--(BUSINESS WIRE)--Moody’s Corporation (NYSE: MCO) announced today that it has acquired Wall Street Analytics, Inc., a leading developer of sophisticated structured finance analysis and monitoring software. The firm will now be known as Moody’s Wall Street Analytics. Terms of the transaction will not be disclosed and the financial impact to Moody’s is not expected to be material. The acquisition will broaden Moody’s capabilities in the analysis and monitoring of complex structured debt securities while increasing the firm’s analytical and product development staff dedicated to creating new software and analytic tools for the structured finance market. In particular, the addition of Wall Street Analytics enhances Moody’s current collateralized debt obligations (CDO) product suite and immediately adds mortgage-backed securities (MBS) and asset-backed securities (ABS) analytic software capabilities. The acquisition will also enable Wall Street Analytics to tap Moody’s deep structured finance expertise, extensive CDO and MBS databases and global product marketing capabilities to enhance its offerings to existing customers and further expand its reach in the structured finance marketplace in the U.S. and internationally. “The structured finance markets are growing rapidly worldwide, bringing a heightened demand for supporting research, data and analysis,” said Raymond W. McDaniel, Jr., Chairman and Chief Executive Officer of Moody’s Corporation. “Wall Street Analytics is an excellent addition that will help us meet the growing market demand for tools to analyze structured securities and accelerate our growth in this segment. This investment is also consistent with our strategy to invest in growth sectors that are highly complementary to our core businesses.” www.moodys.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. A.M. Best Methodology: Property/Casualty Supplemental Rating Questionnaire OLDWICK, N.J.--(BUSINESS WIRE)--In an effort to provide more time to all parties associated with the completion of A.M. Best Co.’s Property/Casualty Supplemental Rating Questionnaire (SRQ), A.M. Best has placed the updated natural catastrophe-related questions on its website. The changes to the existing questions, as well as new questions related to the use of non-traditional catastrophe mitigation techniques, warranted the need to notify interested parties earlier than the January 2007 release date. The natural catastrophe modeling questions are designed to gain further insight into a company’s catastrophe risk management. With these questions, A.M. Best continues to put a high degree of emphasis on an organization’s overall catastrophe management capabilities and its impact on financial strength. Going forward, A.M. Best will more closely scrutinize the entire probable maximum loss curve to account for the range of possibilities a company may face. Specifically, A.M. Best will be requesting Tail Value at Risk (TVAR) or Tail Conditional Expectation (TCE) for the various return periods. In the near-term, A.M. Best will continue to utilize the existing single occurrence probable maximum loss methodology with assessment of the loss curves used for sensitivity analysis. Through the SRQ, A.M. Best will conduct additional industry analysis to determine if a revised approach to assessing catastrophe risk is appropriate. The new catastrophe-related questions can be accessed at www.ambest.com/ratings/methodology/srq-catastrophe.pdf. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. A.M. Best Special Report: Year-End Banking Summary for 2006 OLDWICK, N.J.--(BUSINESS WIRE)--For the past couple of years, the U.S. banking industry has been managing successfully through margin compression pressures, benefiting from fairly stable economic conditions and the banks’ ability to draw down on loss reserves and generate fee income. Several notable developments occurred in the third quarter of 2006 and beyond that confirm A.M. Best Co.’s February 2006 commentary on the turning of the industry cycle: a new Federal Reserve policy holding the line on raising rates; upward creeping of loan losses, a more erratic performance of trading income at large institutions; and increased competition for deposits and loans that has been driving up the cost of funds and driving down asset yields. As a result, while the industry continued to turn in strong earnings during the third quarter of this year, the number of institutions showing gains in earnings continued on a steady decline since its peak in June 2005. More important, other, underlying shifts in the balance sheet mix and operating statements of U.S. banks suggest a trend toward higher levels of credit and interest rate risk in various segments in the industry. In 2006, the U.S. banking industry saw a continuation of the transition between consumer lending and commercial lending as a primary driver of growth in bank loans and operating results. Loan growth rates in both the construction and land development (C&LD) (29.47%) and commercial real estate (CRE) (9.14%) segments exceeded the growth rate for 1-4 family residential property loans (6.83%) in the nine months ended September 30, 2006. The strong growth in the C&LD and CRE segments continues a trend that began in 2003 when growth rates in these two loan categories eclipsed growth in 1-4 family residential lending. This study is available electronically from the A.M. Best Co. web site at www.ambest.com/banks. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Woodbury Financial Services Acquires Diversified Financial Concepts WOODBURY, Minn.--(BUSINESS WIRE)--Woodbury Financial Services, a subsidiary of The Hartford Financial Services Group, Inc. (NYSE: HIG) and leading independent broker-dealer, has agreed to acquire the assets of Diversified Financial Concepts (DFC). DFC is an investment and insurance products’ marketing firm affiliated with Woodbury, which is based in Tucson, Arizona. The agreement is expected to close in February. DFC has approximately 240 employees located in 24 branch offices in 12 states. The organization has over $1 billion of assets under management and, in 2005, produced $13.5 million in GDC, or gross dealer concession, from $205 million in investment product sales. Woodbury Financial Services, part of The Hartford Financial Services Group, Inc. and recent winner of Investment Advisor magazine’s 2006 Division IV Broker/Dealer of the Year award, is a broker/dealer with more than 1,900 independent representatives nationwide and 200 home office employees. www.thehartford.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. BB&T Selects Evolution Benefits to Provide Card Services for Its Health Savings Accounts AVON, Conn.--(BUSINESS WIRE)--BB&T Corporation (NYSE: BBT) has selected Evolution Benefits to provide card services for its recently announced Health Savings Account product. This expands the parties’ relationship that started in late 2005 when Evolution Benefits began providing card services to BB&T’s subsidiary, Stanley, Hunt, Dupree & Rhine Inc. Under the new relationship, BB&T will use Evolution Benefits’ prepaid benefits card services to power the Benefit Access card. The card is issued to consumers who establish individual HSAs through BB&T’s extensive network of more than 1,450 financial centers, as well as those who sign up for BB&T HSAs through their employer. It serves as the primary vehicle for accessing the funds in their HSAs to pay for health-care expenses on a pre-tax basis. The BB&T HSA product is fully integrated and provides a mutual fund component, online access, online bill payment, and deposits and withdrawals can be made at BB&T branches. Health Savings Accounts are proving increasingly popular as more employers and individuals move to high-deductible health plans. They represent an attractive, tax advantaged way to either pay for current health-care expenses or save for the future. Prepaid or debit cards are the most popular way for people to access the funds in their accounts, as they represent a convenient way to pay providers directly from the HSA. Evolution Benefits, Inc. headquartered in Avon, Connecticut, began operation in 2002. Its primary product, the Benny™ prepaid benefits card, applies advanced payment and pioneering electronic substantiation technologies to FSAs, HSAs, HRAs and Qualified Transportation Accounts. Evolution Benefits now powers the programs of more than 140 managed care and administrative services organizations and covers more than 3,600 employers, including 50 of the nation’s top-ranked Fortune and Forbes companies. www.EvolutionBenefits.com www.BBT.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. INSURANCE NEWSCAST "Pictures Of The Day" -- Sponsored By:
View INSURANCE NEWSCAST "Sports Pictures Of The Day" View INSURANCE NEWSCAST "Entertainment Pictures Of The Day" Sponsored By:
21. Top Healthcare Minds Gather for Comprehensive National Healthcare Summit MIRAMAR, Fla., Dec. 19 /PRNewswire/ -- On January 21-23, 2007, at The Rosen Centre Hotel in sunny Orlando, Florida, more than 50 of the nation's top healthcare experts will gather under one roof at the National Summit on Quality/Performance Management & Compliance in Healthcare, sponsored by Comprehensive Health Solutions, Inc. (CHS). More than 40 sessions will be offered addressing Compliance, Quality and Operational issues - with four specific tracks for: Hospital/Health Systems, Home Health, Hospice and Long-Term Care. For more information and a full outline of sessions, speakers and events, visit: http://www.chspartners.com or call 888-243-0281. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Insurance Media Firm Offers New Web-Log Insurance Writer, a Jefferson City-based risk management and insurance media firm, recently started a web-log devoted to all aspects of marketing for insurance professionals. Insurance Writer was founded in 1993 by Nancy Germond. The blogs URL is www.insurancecopywriter.blogspot.com. Her website is www.insurancewriter.com. Her blog can be accessed from either URL. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Actuate Renews Agreement with Oracle SOUTH SAN FRANCISCO, Calif. & REDWOOD SHORES, Calif.--(BUSINESS WIRE)--Actuate Corporation (Nasdaq:ACTU), the world leader in Enterprise Reporting and Performance Management Applications that empower 100% of users to achieve breakthrough corporate performance, and Oracle (Nasdaq GS:ORCL) today announced that the companies have signed an agreement to extend the use of Actuate’s reporting capabilities within Siebel CRM for a further three years. The agreement marks a decade of Actuate’s world class reporting technology constituting a fundamental part of Siebel CRM. Encompassing 490 discrete applications and 21 industry-specific solutions, Siebel CRM is the market-leading, multi channel solution that enables organizations to establish an enterprise wide view of their customers across all lines of business, geographies and communication channels. With Siebel CRM, organizations are able to analyze and optimize customer, partner and employee interactions to dramatically increase customer satisfaction and loyalty, maximize revenue, and increase productivity and performance. With over four million CRM deployed seats and over 100 million registered self-service users, Siebel CRM applications are positioned in the Leaders quadrant in several Gartner Magic Quadrants for CRM. Actuate reporting capabilities will benefit Siebel CRM users. www.oracle.com www.actuate.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. WellnessPlus from CIGNA Dental Expands DPPO Product Suite PLANTATION, Fla., Dec. 19, 2006 /PRNewswire/ -- CIGNA Dental today announced the expansion of its DPPO product suite to include three new CIGNA Dental WellnessPlus* features that reward members who receive preventive dental care by increasing their benefits. "Incentives in employee benefits are an important tool employers can use to encourage employees to adopt healthy behaviors," said Rebekah Whitehouse, chief marketing officer for CIGNA Dental. "This fresh new consumer-focused approach applies concepts routinely used in medical plans to the field of dental benefits, with the goal of improving the overall health of employees while increasing opportunities to control costs and improve productivity." Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. Great American Insurance To Give Away Freightliner at Mid-America Trucking Show Mid-America Trucking Show CINCINNATI--(BUSINESS WIRE)--Great American (NYSE:AFG)(NASDAQ:AFG), one of the nation’s leading insurers of independent owner operators, will give away more than just a bag of trade show trinkets at the upcoming Mid-America Trucking Show to be held March 22-24, 2007 in Louisville, KY. One lucky winner will be chosen at random from entrants in the company’s BIG RIG GIVEAWAY Sweepstakes. Great American is giving away a 2002 Freightliner Classic XL, enhanced by 4 State Trucks, home of TV’s famous Chrome Shop Mafia. 4 State Trucks is well-known for truck makeovers that include customized interiors and elaborate airbrushed graphics on the truck’s cab and trailer. “This Freightliner will be completely ‘tricked out,’" according to Tim Clinton, Director of Marketing for Great American’s Trucking Division. www.GreatAmericanTrucker.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. International Excess Companies Expands Its Operations by Forming a New Pittsburgh Branch as an Additional Resource for Clients PITTSBURGH, Dec. 19 /PRNewswire/ -- International Excess Companies opens International Excess of Pittsburgh led by industry veteran W. Flagg Pavlik. His responsibilities include the strategic formulation of brokerage, binding and program capabilities of all property and casualty activities. Marc Pender, Executive Vice President of International Excess Companies, stated, "This is a continuation of our expansion plan and a renewed commitment to our western Pennsylvania region." www.internationalexcess.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. First Mercury Financial Corporation Announces Completion of $25.0 Million Trust Preferred Securities Offering SOUTHFIELD, Mich., Dec. 18 /PRNewswire-FirstCall/ -- First Mercury Financial Corporation (NYSE: FMR) ("First Mercury" or the "Company") announced today that on Thursday, December 14, 2006, it closed on the private placement sale of $25.0 million of thirty-year floating rate trust preferred securities issued through a wholly-owned trust subsidiary."Trust preferred securities are a key component of our capital management strategy to support premium growth and to create shareholder value," said Richard Smith, chairman and chief executive officer. First Mercury Financial Corporation markets and underwrites specialty commercial insurance products, focusing on niche and underserved segments where the company has underwriting expertise and other competitive advantages. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. Eastern Insurance Holdings, Inc. CEO to Ring the NASDAQ Stock Market Closing Bell LANCASTER, Pa., Dec. 18 /PRNewswire-FirstCall/ -- Eastern Insurance Holdings, Inc. (Nasdaq: EIHI) (EIHI) announced today that Bruce Eckert, Chief Executive Officer, will preside over the closing bell for the NASDAQ Stock Market on December 19, 2006.The closing bell ceremony celebrates EIHI's June 2006 listing on NASDAQ, and its stock offering in which EIHI sold 7,475,000 shares of its common stock at a price of $10 per share, raising gross proceeds of $74.75 million. The Lancaster-based holding company, through its operating subsidiaries, is a specialty underwriter of niche products for commercial markets. www.easterninsuranceholdings.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. Fitch: Capital Structure Developments Key Driver of U.S. Recovery Rating Changes Fitch notes that the most common driver of Recovery Rating changes has been changes in the amount of secured debt in issuer capital structures, affecting in particular Recovery Ratings on senior unsecured bonds. Enterprise value considerations also resulted in Recovery Rating changes but to a lesser degree than capital structure dynamics. These are the results of a new study examining the distribution of Fitch's Recovery Ratings in their first full year after launch. The study also shows that investors incorporating only a default risk constraint in their credit decision process would be accepting a good deal of uncertainty in terms of possible recovery values in the event of default. For more information and opinions, please see our research titled: 'Recovery Ratings Reveal Diverse Expectations for Loss in the Event of Default' on our website: Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 30. Chaucer Holdings PLC selects Keane SCORE(TM) to enhance Risk Management and Compliance processes in UK Financial Services Arena Wayne, Pa.-Dec 18, 2006-The Keane Organization, Inc., a leading provider of compliance and risk management solutions to Fortune 1000 corporations, today announced that Chaucer Holdings, PLC, has adopted Keane SCORETM, Keane's proprietary technology platform to enhance enterprise-wide governance, risk and compliance management efficiencies throughout the Chaucer business. Keane SCORE is a web-based solution that automates and streamlines a number of key components required to accomplish and maintain compliance in a collaborative and transparent environment. The Keane Organization delivers a comprehensive suite of professional services and technology solutions that include consulting and management services as well as proprietary systems to drive efficiency and address the ever-increasing complexities of enterprise-wide risk and compliance management. www.KeaneBRMS.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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