INSURANCE NEWSCAST
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Newsletter In The World For a fraction of the cost of other mediums, INSURANCE NEWSCAST can help build your brand and generate marketing leads within the entire insurance industry, providing three ways for future clients to contact you; via telephone, via e-mail, and via your website. Your company's products and services can be displayed at the top of this newsletter where it is the first thing seen by over 450,000 subscribers - your potential future clients. To request a media kit, send an e-mail to wpodgurski@aol.com call 888-282-1765 or click here to read the media kit online. YOU HAVE MARKETING CHOICES; Trade Shows, Direct Mail, Magazine Ads and Telemarketing, just to name a few. Consider INSURANCE NEWSCAST as a branding and lead-generating supplement to your other marketing efforts. An INSURANCE NEWSCAST ad placement will deliver your message to 350,000 INSURANCE NEWSCAST subscribers identifying your company, products, and services, and providing your telephone number, hyper-linked e-mail address and hyper-linked website URL... and at a fraction of the cost of other marketing options. Daily Quote: "Neither a borrow nor a lender be; for loan oft loses both itself and friend." - - William Shakespeare 1. INSURANCE NEWSCAST Approaches Half-Million Industry Subscribers Cleveland, OH – 01/02/07 – InsuranceBroadcasting.com announced that their INSURANCE NEWSCAST daily subscriber base increased over 100,000 in 2006 and is approaching the half-million daily subscriber milestone. The exact number on January 2, 2007 was 456,993 which started with approximately 300 subscribers when the service was inaugurated in January, 1999. “We know that the amount of information of all kinds has seemed to increase exponentially and our goal is to find the insurance news and information formats that people want. That is why we introduced both a ‘Headlines Only’ and an ‘Audio Version’ of INSURANCE NEWSCAST this year.” said Walter B. Podgurski, CEO of InsuranceBroadcasting.com. “The ‘Headlines Only’ version is for people who want a quick look at what the insurance news is, and/or don’t want to load too much content onto a hand-held device. The ‘Headlines Only’ also provides the news that will be in the next day’s newsletter late in the afternoon the day before.” “We are most excited about the ‘Audio Version’ of INSURANCE NEWSCAST. We use a professional announcer utilizing professional equipment in a professional studio. The result is a quality newscast that people can listen to on their desktop. It can also be saved as an MP3 file and downloaded to a MP3 player or burned to a CD. Each ‘Audio Version is about 15 – 20 minutes and people can easily listen while on their way back and forth to work, etc.” There are no subscription fees or charges to access any of the three versions of the newsletter. Complete information is available at www.insurancebroadcasting.com. InsuranceBroadcasting.Com is a next generation media organization facilitating the exchange of information between insurance professionals; utilizing the improvements available from emerging technology to deliver meaningful information Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Insurers, DaimlerChrysler settle dispute Tue Jan 2, 2007 9:48am ET - (Reuters) - DaimlerChrysler (DCXGn.DE: ) and a group of insurers have agreed to settle a dispute over recovering the costs of a U.S. class-action lawsuit in 2003, the German car maker and insurers said on Tuesday. Spokesmen for DaimlerChrysler and U.S. insurer ACE (ACE.N: ), which led a consortium of insurers, said that an agreement had been reached, but declined to give details. The head of ACE's German operations, Lothar Riedle, told Reuters he hoped the settlement would spark a discussion in Germany about whether Director's & Officer's liability insurance coverage was too broad. The Financial Times Deutschland reported on Tuesday that a group of insurance companies led by ACE had agreed shortly before the end of the year to pay DaimlerChrysler 168 million euros ($221.5 million) to settle the dispute. The paper did not cite sources for the story. DaimlerChrysler agreed in August 2003 to pay some U.S. shareholders around 275 million euros to settle allegations that the 1998 deal to form the world's fifth-biggest carmaker was a takeover of Chrysler by Daimler-Benz, not a merger of equals as the company had said. At the time, DaimlerChrysler said insurance would cover up to 200 million euros of the cost. The Financial Times Deutschland said the group of insurers led by ACE in the talks included France's AXA (AXAF.PA: ), Germany's Gerling and HDI, Chubb (CB.N: ), XL Capital (XL.N: ), Zurich Financial (ZURN.VX: ) and Basler (BALN.VX: ). Axa and Zurich Financial confirmed that they were part of the insurance consortium deal but declined further comment, Gerling and HDI declined comment, while Basler, Chubb, and XL were not immediately available for comment. The paper said that insurer AIG (AIG.N: ) had already agreed to pay 25 million euros to Daimler and that the late December agreement with ACE meant that Daimler had recovered most of the money it had sought. © Reuters 2007. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. AXA plans to cut costs, jobs in Germany -magazine FRANKFURT, Jan 2 (Reuters) - French insurer AXA (AXAF.PA: ) is targeting cost savings of about 10 percent in its German operations by the end of 2008, partly through job cuts, its chief executive told a German magazine on Tuesday. "Our goal is to achieve savings of at least 10 percent on the joint costs of AXA and DBV-Winterthur, or around 120 million euros ($159 million)," AXA Chief Executive Henri de Castries told Germany's Capital magazine in an interview released in advance of publication on Thursday. AXA agreed to buy Switzerland's Winterthur insurance from Credit Suisse (CSGN.VX: ) in June last year for about $11 billion. De Castries said the scale of job cuts would depend on whether it could achieve additional growth in Germany. AXA employs over 8,000 workers and DBV-Winterthur around 4,000 in Germany. A number of insurers have announced job cuts in Germany in an effort to cut costs and boost profit, with the country's largest insurer Allianz (ALVG.DE: ) planning to cut around 5,700 jobs by 2008 and AMB Generali (AMBG.DE: ) targeting around 1,500 cuts over the same period. German insurance association GDV expects about 4,000 jobs to go in the industry in 2007. © Reuters 2007. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Power Corp. set to buy Boston Putnam Investments to get into huge U.S. market By Luann Lasalle - MONTREAL (CP) - Power Corp. of Canada (TSX:POW), owner of the country's largest mutual fund company, is reportedly making a move into the huge U.S. financial services market with a US$3.9-billion deal to buy former scandal-plagued Putnam Investments. The Wall Street Journal reported Friday that New York-based Marsh & McLennan Cos., the largest insurance broker in the United States, has reached an agreement in principle to sell the Putnam unit to Power. "They can't grow any more in Canada," portfolio manager Paul Gardner said of Montreal-based Power. "They've got Investors, they've got Mackenzie. They've got a large part of this business," said Gardner, partner at Toronto-based Avenue Investment Management. Power Financial (TSX:PWF), part of the Power Corp. conglomerate controlled by Montreal's Desmarais family, owns Canada's largest mutual fund family through its stake in IGM Financial Inc. (TSX:IGM), Winnipeg-headquartered parent of Investors Group and Mackenzie Financial. It also owns insurer Great-West Lifeco Inc. (TSX:GWO), also based in Winnipeg. Power Corp. couldn't be reached for comment on Friday and a spokesman for Marsh & McLennan refused to comment on the report to sell Boston-area Putnam. But people in the U.S. familiar with the negotiations told the Associated Press the Wall Street Journal report is accurate. Gardner noted that even though Power will have "critical mass" in the U.S., it will face a different kind of playing field. "It's way more competitive in the U.S. than in Canada, so the only thing that they're going to have to understand is they're no longer the big guy in the room," he said. "They're one of several big guys or medium-sized guys in the U.S. and they're going to have to be very focused. It's all about cost cutting." Power Financial declined to say earlier this month whether it was trying to buy Putnam. Putnam, which employs more than 3,000 people, was put up for sale in September, hurt by lagging fund performance and investigations into alleged trading abuses. Putnam has US$191 billion under management, less than half its peak in 2000, after being hammered by investor redemptions since being caught up in the 2003 market timing scandal and paying more than $190 million to settle federal and state investigations into mutual fund trading abuses. However, in October Putnam reported net inflow to its funds for the first time in several years, and analysts have valued the firm at between US$3 billion and $4.5 billion. Marsh & McLennan has been under pressure to spin off businesses since 2005, when it agreed to pay US$850 million to settle allegations of bid rigging and price fixing in the sale of property and casualty insurance to businesses. Steven Ader of Standard & Poor's said his firm has put Marsh & McLennan on "credit watch with developing implications." If the sale goes ahead, then the question is whether the proceeds will be applied to reduce debt, make investments in existing lines of business or returned to shareholders, said Ader, director with the ratings firm in New York. "So the credit watch developing means the rating could go up, it could stay the same or go down," said Ader. Donald Light, senior analyst with Celent, a Boston financial research firm, said it appears Marsh & McLennan is doing well on the sale. "The reported price, $3.9 billion, is on the high side," Light said in a research note. "So the winner here might be Marsh & McLennan. It can use the extra capital to continue finding ways to restore the profit margins of its Marsh brokerage unit, and to rebuild the margins of its Mercer employee benefits group." Power Financial raised its dividend in November after more than doubling its third-quarter earnings to C$795 million, thanks to a one-time gain and solid results from Great-West Lifeco and IGM Financial. Its July-September revenue was $7.2 billion, up from $5.7 billion a year earlier. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. MetLife Resolves Investigation by New York Attorney General NEW YORK--(BUSINESS WIRE)--MetLife, Inc. (NYSE: MET) announced today that its wholly-owned subsidiary, Metropolitan Life Insurance Company (MetLife), resolved a previously disclosed investigation by the New York Attorney General’s Office (NYAG). The NYAG’s investigation related to payments to intermediaries in the marketing and sale of group life and disability, group long-term care and group accidental death and dismemberment insurance and related matters. In the settlement, MetLife does not admit liability as to any issue of fact or law. Among other things, MetLife has agreed to certain business reforms relating to compensation of producers of group insurance, compensation disclosures to group insurance clients and the adoption of related standards of conduct, some of which it had implemented following the commencement of the NYAG’s investigation. MetLife will also pay a fine and make a payment to a restitution fund. MetLife cooperated fully with the NYAG’s office throughout the pendency of the matter. MetLife believes that resolving this matter is in the best interests of its shareholders, customers and policyholders. MetLife does not expect that the settlement will adversely affect its business. www.metlife.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 6. Arthur J. Gallagher & Co. Reaches Settlement in Federal Class Action Related to Contingent Commissions ITASCA, Ill., Dec. 29 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co. (NYSE: AJG) announced today that it has agreed to resolve all claims in the Federal Multi-District (MDL) class action pending in the New Jersey Federal District Court against commercial insurers and brokers relating to industry-wide contingent commission matters. Gallagher admitted no wrongdoing, but said it chose to conclude its involvement, rather than prolong what could be a costly and burdensome lawsuit. Gallagher established a provision for this matter in 2005, and as a result, substantially all of the costs associated with the MDL settlement have been reserved for in its previously reported balance sheet. Gallagher will incur a pretax charge in its fourth quarter 2006 earnings of between $5.0 million to $10.0 million to increase its reserve for the costs to be incurred to administratively conclude the MDL settlement and to resolve other regulatory and civil litigation matters. The settlement, which is subject to court approval, provides for Gallagher to distribute $28.0 million to current and former clients and others that used a broker to purchase retail insurance from 1994 to 2005. The company will also pay $8.85 million in plaintiff's attorney fees. "We are pleased to put this legal matter behind us so we can focus all of our efforts on doing what we do best -- providing our clients with high-quality, cost-effective insurance and risk management services," said J. Patrick Gallagher, Jr., Chairman, President and CEO. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. US insurance broker Gallagher settles suit NEW YORK, Dec 29 (Reuters) - U.S. insurance brokerage Arthur J. Gallagher & Co. (AJG.N: ) said on Friday it will pay $36.9 million to settle a class-action lawsuit accusing it of accepting improper "contingent commissions" for steering business to particular insurers. The settlement includes payments of $28 million to current and former clients who used brokers to buy insurance from 1994 to 2005. It also includes $8.85 million of legal fees. Gallagher did not admit wrongdoing, but said it settled the two-year-old lawsuit to avoid the costs and burdens of litigation. The settlement requires approval by the U.S. District Court in New Jersey. Itasca, Illinois-based Gallagher said it previously set aside substantially all costs associated with the settlement. It will, however, take a $5 million to $10 million pre-tax charge in the fourth quarter to increase its reserve for the settlement and to resolve other litigation. The complaint accused Gallagher and other brokerages of conspiring to steer business to insurers that paid hidden fees, rather than those offering the best coverage, Gallagher has said in regulatory filings. Insurance brokerages led by Marsh & McLennan Cos. (MMC.N: ) have paid more than $1 billion to resolve probes by New York State Attorney General Eliot Spitzer and other regulators into the practice, and many have abandoned contingent commissions. Gallagher shares closed Friday down 46 cents at $29.55 on the New York Stock Exchange. They have fallen 4 percent this year. © Reuters 2007. All Rights Reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. WILLIS RE ISSUES ANNUAL REINSURANCE RENEWALS REVIEW Willis Re 1st View: The Tipping Point? New York, NY, January 2, 2007 – Willis Group Holdings (NYSE:WSH), the global insurance broker, has released its reinsurance review of the marketplace for the January 1, 2007 renewals entitled “The Tipping Point?” Willis’ market commentary is the first from a major broker analyzing the 1/1/07 renewals season. The report comprehensively covers over 25 territories and 17 classes of business. The key findings of the report are: · Rates for both property and casualty exposures are generally flat or falling modestly. In Europe (with the exception of wind exposed Northern European multi- territory covers where rates are firm), Asia, Australia, Latin America and those areas and classes of business of the United States not prone to natural catastrophes, rates are flat or have fallen by 5% to 10%. · The major exception to this trend is United States property business, where an insurer has significant East Coast or Gulf Coast wind-exposed business. This business is experiencing rate increases due to five macro factors:
Looking forward to 2007, the atmosphere of relief is almost tangible as the market takes advantage of the current respite and works to apply the hard learned risk management lessons of the 2004 and 2005 underwriting years. Reinsurers are rebuilding both their balance sheets and their commercial confidence while in parallel insurers are creating and implementing sophisticated enterprise risk management programs. The full report is available at: http://www.willis.com/news/Publications/Willis_Re_view_07.pdf Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Securities Fraud Class Actions Tumbled to an All-Time Low in 2006, Finds New Study by Stanford Law School and Cornerstone Research Strong Federal Enforcement Activity and Stable Stock Market Contribute to Decline BOSTON & PALO ALTO, Calif.--(BUSINESS WIRE)--The number of securities fraud class actions filed in 2006 was the lowest ever recorded in a calendar year since the adoption of the Public Securities Litigation Reform Act (PSLRA) of 1995, notes the Securities Class Action Filings 2006 Year in Review report released today by the Stanford Law School Securities Class Action Clearinghouse, a joint project between Stanford Law School and Cornerstone Research. The study reports securities fraud class actions decreased by 38 percent since 2005, plunging from 178 filings to just 110, making this year’s numbers nearly 43 percent lower than the ten-year historical average of 193. Reasons The study attributes the record low numbers of securities fraud class action filings in 2006 to three primary factors. First, the strengthened federal enforcement environment reflected in the pressure that the SEC and Department of Justice now bring to bear on corporations to conduct internal investigations that implicate the individual executives responsible for the fraud, may be reducing the amount of fraud in the market. Second, a strong stock market combined with lower stock price volatility typically reduces the number of cases filed. Third, the overwhelming majority of securities fraud class actions that were filed in the late 1990s to the early 2000s are now behind us. While the boom and bust cycle of this era may have contributed to the peak, the numbers in 2006 are low even when compared to pre-peak activity. “These are unprecedented numbers, and my bet is that the private securities fraud litigation market is shrinking because corporations are engaging in less activity that gives plaintiffs an excuse to file a complaint alleging fraud,” explained Stanford Law School Professor Joseph Grundfest, Director of the Securities Class Action Clearinghouse, co-Director of the Rock Center on Corporate Governance, and former Commissioner of the Securities and Exchange Commission. “The federal government is a much more aggressive adversary than the private bar, and the feds can force a level of compliance that private class action lawyers could never touch. I think we are seeing the effects of a tougher and smarter campaign against white collar fraud by the SEC and Department of Justice.” Professor Grundfest and Dr. Gould are available to speak to the media about the report. The full text of the 2006 Year in Review report can be found on both the Clearinghouse site at http://securities.stanford.edu and on Cornerstone Research’s website at http://www.cornerstone.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. BestWeek: Insurers Count More on Outside Actuaries OLDWICK, N.J.--(BUSINESS WIRE)--North American insurers increasingly are seeking the services of external or unaffiliated actuarial firms to provide actuarial opinions for annual statutory filings. This is perhaps the most striking change in the data gathered as part of A.M. Best Co.’s 2007 annual review of the accounting and actuarial markets in the United States and Canada as they relate to the insurance industry, which appears in the January 1, 2007 BestWeek. At work here, according to the report, appears to be some spirit of the Sarbanes-Oxley Act of 2002, with not only companies moving away from the use of internal or affiliated actuarial opinions to the use of independent actuarial firms, but also the survey results show some insurers moving away from using the same firm in both auditing and actuarial functions. www.ambest.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. Assurity Life and Security Financial Life Complete Merger Assurity Life and Security Financial Life, both headquartered in Lincoln, Nebraska, for more than a century, have merged their operating companies effective Jan. 1, 2007. Tom Henning, CLU, ChFC, CFA, President, Chairman and CEO, announced that the name of the combined company will be Assurity Life Insurance Company. The merger is the culmination of a holding company consolidation which created Assurity Security Group Inc. on Jan. 1, 2005, while the operating companies remained separate entities. With the merger, Assurity Life will have more than $2.1 billion in assets and approximately $225 million in capital, Henning said. The company has more than 400,000 policies and certificates in force. “Our combined company now comprises a larger, stronger financial services organization that will benefit from economies of scale, expanded marketing opportunities and even greater financial strength,” Henning said. “Assurity will be in a stronger position to capitalize on growth opportunities, enhance our independent insurance ratings and better serve the long-term interests of our customers.” As a diversified insurance and financial services organization, Assurity Life will continue to market disability income, critical illness and life insurance, annuities and specialty insurance [plans through its representatives, worksite distribution and direct mail. Pension administration and investment management services are available through Pine Lake Advisors Inc., a company subsidiary. Assurity has approximately 40,000 representatives serving customers nationwide. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Willis Group Acquires Carter Insurance Group NEW YORK--(BUSINESS WIRE)--Willis Group Holdings Limited (NYSE: WSH), the global insurance broker, announced today the asset acquisition of Carter Insurance Group, Inc., based in Tampa, FL. Carter is an underwriting manager and program administrator specializing in franchised auto, truck, RV dealers, and auto/truck service businesses. Carter Insurance Group will be part of Willis’ Programs Practice. The terms of the transaction were not disclosed. Founded in 1927, Carter Insurance Group serves independent insurance agents and brokers in 49 states in the auto and auto service industries. Car-Pac©, one of Carter Insurance Group’s key programs, writes property and casualty insurance for auto, truck and RV dealerships. Its Auto Service Center© program is comprehensively designed to meet the needs of auto and truck service centers, parts stores, tire stores, convenience stores with gas services and more. The management and staff of the Carter Group will remain with the company and no immediate changes in operations are planned. www.willis.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. PMI Dental Health Plan Merges With Parent Company Delta Dental of California SAN FRANCISCO--(BUSINESS WIRE)--PMI Dental Health Plan, one of the largest prepaid dental plans in California and the nation, announced today its merger with parent company Delta Dental of California. The merger — just approved by the state’s Department of Managed Health Care (DMHC) — is effective January 1, 2007. While the immediate effect of the merger will be transparent to customers and enrollees, company officials say it will streamline administration and eliminate duplicative processes. PMI, based in Cerritos, Calif., has operated under a separate health care service plan license since its acquisition by Delta Dental in 1985, offering and administering the DeltaCare USA prepaid dental product in California. PMI’s role as national administrator of the DeltaCare USA program shifts to Delta Dental of California, whose subsidiary Delta Dental Insurance Company will serve as a third-party administrator for its marketing affiliates and other Delta Dental member companies in the District of Columbia plus 17 additional states: Alabama, Arizona, Colorado, Connecticut, Florida, Georgia, Maryland, Nevada, New Mexico, New York, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Washington and West Virginia. www.delta.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Bank of the West Subsidiary Expands with Acquisition of Oregon-Based Contractor’s Insurance Services, Inc. FARGO, N.D. & TUALATIN, Ore.--(BUSINESS WIRE)--Bank of the West announced today its wholly-owned subsidiary, BW Insurance Agency, Inc., (BWIA) has acquired Contractor’s Insurance Services, Inc., (CIS) a full service insurance agency offering a variety of commercial and personal insurance lines. CIS specializes in providing insurance, risk management and asset protection services for the burgeoning building industry throughout the Pacific Northwest. Founded in 1985 and based in the Portland suburb of Tualatin, CIS offers group health, life, auto, home, bond, liability and disability as well as Workers Compensation insurance and is licensed to write policies in Oregon, Washington, Idaho, California, Utah, Wyoming, Montana, and South Carolina. CIS has specialists serving homebuilders and artisan contractors, garage, apartment or condominium owners, and restaurateurs. CIS is a market leader in providing general liability insurance for residential general contractors and artisan contractors as well as suppliers to the construction industry. www.bankofthewest.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Nabity-Perry Insurance, Inc. Joins Bank of the West Subsidiary FARGO, N.D. & OMAHA, Neb.--(BUSINESS WIRE)--Bank of the West announced today its wholly-owned subsidiary, BW Insurance Agency, Inc., (BWIA) has acquired Nabity-Perry Insurance, Inc., a full service insurance agency involved in insurance, risk management and asset protection, based in Omaha, Nebraska. Established in 1966, Nabity-Perry Insurance offers a variety of commercial and personal lines, bond, life and health insurance products and serves about 5,000 individuals and families and the insurance needs of more than 1,000 business concerns in Omaha, Bennington, Elkhorn and surrounding areas. www.bankofthewest.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Acquisition From Santam Increases Share of Group Underwriting Capacity to 81% LONDON, Jan. 2 /PRNewswire-FirstCall/ -- Beazley announces that it has acquired the entire issued share capital of Santam Corporate Ltd from Santam UK Ltd. Santam Corporate Ltd participates solely on syndicate 623 with a capacity of 19.0m pounds Sterling. The acquisition allows Beazley to increase its share of the combined capacity for syndicates 2623 and 623 of 860.0m pounds to 81% for 2007. This increases the amount the Group underwrites at Lloyd's to 697.0m pounds (2006: 647.0m pounds). As a result of the Group's reduced capital requirement for 2007, this additional capacity will not require additional funds to be lodged at Lloyd's. www.beazley.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. The Enstar Group, Inc. and Castlewood Holdings Limited Announce Acquisition MONTGOMERY, Ala. and HAMILTON, Bermuda, Dec. 29 /PRNewswire-FirstCall/ -- The Enstar Group, Inc. ("Enstar") (Nasdaq: ESGR) and Castlewood Holdings Limited ("Castlewood") today announced that Castlewood and Oceania Holdings Ltd, a wholly-owned subsidiary of Castlewood, have entered into a definitive agreement for the purchase of Inter-Ocean Holdings Ltd. ("Inter-Ocean") for a purchase price of approximately $57 million. Inter-Ocean owns two reinsurers, one based in Bermuda and one based in Ireland. Both companies wrote international reinsurance and had in place retrocessional policies providing for the full reinsurance of all of the risks they assumed. In April 2005, the board of directors of Inter-Ocean decided to have both companies cease underwriting new business and placed them into run-off. Castlewood has been providing management services to Inter-Ocean for approximately 11 months. Completion of the transaction is conditioned on, among other things, Bermuda regulatory approval and satisfaction of various other customary closing conditions. The transaction is expected to close in the first quarter of 2007 and is expected to be financed by approximately $24.5 million of new bank debt and available cash on hand. Castlewood, a Bermuda company, acquires and manages insurance and reinsurance companies in run-off and provides management, consultancy and other services to the insurance and reinsurance industry. Enstar owns an approximately 33% economic interest in Castlewood and 50% of its voting stock. www.enstargroup.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. Primacy Relocation Acquires Foursquare Relocation MEMPHIS – [Dec. 20, 2006] – Primacy Relocation, a leading provider of employee relocation and global assignment management services, today announced it has acquired Foursquare Relocation in an agreement finalized December 14. The acquisition strengthens Primacy’s range of services and expands operations in London, Paris, Geneva and Amsterdam, a new market for Primacy. Additionally, this acquisition increases Primacy’s Europe, Middle East and Africa (EMEA) business unit revenues by nearly forty percent and adds more than 35 relocation professionals to the Primacy team. Primacy selected Foursquare Relocation for its quality reputation, recognizable client portfolio and quality teams. www.primacy.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Whole Health and ChartWare Partner to Eliminate Medical Costs Driven by Health Risks CLEVELAND--(BUSINESS WIRE)--Computerized health records are playing a crucial role in reducing health care costs in a pioneering pilot project run by Whole Health Management for one of its client companies. “The results so far have been gratifying,” says Dr. Allan Khoury, vice president of clinical operations at Whole Health. Health educators are working with employees at five different locations to decrease health risks, such as blood pressure, smoking, physical inactivity and obesity. “We offer advice and support on losing weight, stopping smoking, exercise, eating better and so on. Addressing reversible health risks is the single best opportunity for employers to reduce health care costs,” Khoury says. “An across-the-board improvement could mean savings of 20 to 25 percent for a company that self-insures or major reductions in premiums for those that don’t.”(1) The program depends on being able to capture and process the data quickly, accurately and inexpensively. A risk factor flow sheet, with hyperlinks to relevant educational materials, was created by Whole Health and ChartWare, the electronic medical records company of Rohnert Park, California. Khoury says ChartWare has shown the flexibility and ease of use to do the job to the exacting standards Whole Health has set. www.chartware.com www.wholehealthnet.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 Launches a New Individual Life Insurance Term Policy with a Money Back Guarantee* NEWARK, N.J.--(BUSINESS WIRE)--Prudential Financial, Inc. (NYSE:PRU) introduced today a new term life insurance policy that includes a money back guarantee. PruLife Return of Premium (ROP) Term, issued by Pruco Life Insurance Company (Pruco Life Insurance Company of New Jersey in NY and NJ) in 29 states**, offers consumers the powerful combination of valuable death benefit protection and the guaranteed return of all premiums paid if the insured lives past the end of the level premium paying period selected (15, 20 or 30 years). “People seeking life insurance are often conflicted between the affordability of term coverage and the desire for the cash value permanent policies can offer,” said Jim Avery, president of Prudential’s Individual Life Insurance business. “The advantage of this new product is that it provides both a death benefit that’s payable while the coverage is inforce and a “living benefit” in the form of a full premium refund if the insured outlives the protection period.” Unlike traditional term insurance policies, ROP term builds cash value. The cash value is guaranteed to grow and become equal to the premiums paid by the end of the initial level premium paying period (15, 20 or 30 years). *Returned premiums do not include premiums paid by the optional disability waiver of premium rider, or any amount of outstanding loans with interest. Policies lapsed or cancelled before the end of the initial level premium paying period will result in only a partial return of premium or no refund at all. www.prudential.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. AIG’s National Union Launches Interactive Application for PrivateRisk Protector® Web-Based Application System Designed to Quickly Bind, Compare and Expedite Quotes NEW YORK--(BUSINESS WIRE)--National Union Fire Insurance Company of Pittsburgh, Pa.(R) (National Union), a member company of American International Group, Inc. (AIG), today announced the release of the Interactive Application for PrivateRisk Protector®. This new Web-based application allows insurance brokers to electronically start and finish the application process in one session. It also enables brokers to close the application while storing all of the data that was input earlier, allowing a broker to open and e-mail the same application to a desired recipient to complete it online and return to the broker for a proposed indication. The Interactive Application can be used in conjunction with AIG ePro, a Web-based system that allows brokers to quote and bind PrivateRisk Protector coverages in just minutes. PrivateRisk Protector is a portfolio of management and professional liability coverages designed for private companies, including, but not limited to: directors and officers liability; employment practice liability; pension trust liability; fidelity and crime coverage; and Internet media liability. The only software required to run the Interactive Application is Adobe Reader 7.0.5 or higher (which can be downloaded free of charge at www.adobe.com. The Interactive Application is accessible at www.accessaig.com, www.aignationalunion.com or www.aigsmallbusiness.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Venture Insurance Programs Launches Independent Marketing Affiliate New marketing communications firm targets non-competing program administrators and retail agencies West Chester, Pa. – Jan. 2, 2007 – Venture Insurance Programs, a national program administrator and leader in the design and underwriting of select industry-focused insurance packages, today announced that it has created a new marketing communications firm dedicated to program administrators and retails agencies—Vertibrands, Inc. Vertibrands ( www.vertibrands.com ) is a full-service marketing communications firm that will serve insurance program administrators in non-competing vertical industries, and retail agencies in non-competing geographic regions. The firm, located in West Chester, Pa., will operate independently of Venture. Richard Look, currently the communications director of Venture Insurance Programs, will serve as president of Vertibrands. "Marketing and promotion has always been one of the strengths of Venture Insurance Programs, which is one of a handful of program administrators to win creative and campaign effectiveness awards from the Insurance Marketing Communications Association," Look said. "We're extending that strength and expertise to Vertibrands and offering clients substantial buying power for their advertising and promotional needs." "Vertibrands’ creative team has both advertising agency experience and insurance industry experience," Look said. "That's a rare and valuable combination that will provide program administrators and retail agencies with effective and efficient marketing solutions." Vertibrands' first client is Venture Insurance Programs, but according to Look, the firm expects substantial growth in its first year. In addition to insurance, Vertibrands will serve companies in other select industries served by their insurance clients. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. American National adds three new Life products December 29, 2006 - American National Insurance Company of Galveston, Texas introduces the Affinity 7 Life Series, a portfolio of three competitive Whole Life products. The Affinity 7 NQ Participating Whole Life is designed for the individual life market, while the Affinity 7 Q Participating Whole Life is meant for the qualified plan markets including 412(i), 457 plans for state and local governments, and non-profit 501 (c) organizations. Affinity 7 457 Participating Whole Life is targeted for 457 market in school districts only. www.img.anicoweb.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. CareQuest University / NavGate Technologies Partnership Melds Expertise in Long-term Care Education with Innovative Care Resource Technology to Give Students Unparalleled Advantage in Sales and Service January 02, 2007 – Madison, Wisconsin – CareQuest University www.CareQuestU.org and NavGate Technologies www.NavGate.org have partnered to offer an innovative approach to the education of insurance and financial professionals in the area of long-term care and disability. CareQuest University, an experienced leader in the areas of research and education for long-term care issues, offers a Long-term Care Group Specialist, LTCGS, designation for insurance and financial professionals and a Certified Care Resource Specialist, CCRS, designation for HR and consulting professionals interested in becoming versed in disability, long-term care, eldercare and retiree care / financial issues. NavGate Technologies developed CareOptionsOnLine (COOL), an innovative care resource tool to underscore the importance of long-term care and disability insurance products. Through cost of care calculators, loss of income projections, a nationwide knowledgebase of care service providers and functional and cognitive behavioral assessments, COOL gives students a tool to apply immediately what they learn in the book to real situations they encounter in the field. “We are thrilled to be able to enhance the education of our students with the addition of CareOptionsOnLine,” says CareQuest University Chief Academic Officer, Dr. David Wegge. “CareOptions allows our students to see the practical applications of our curriculum. COOL will help our graduates become better sales people who know not only how to sell their product, but understand the breadth of issues that build the need for their products. With this extra knowledge, insurance and financial professionals will make better proposals to clients and be viewed as trusted advisors in their professions.” NavGate CEO, Robert Pearson adds, “ With the long-term care insurance market quickly warming up to group prospecting, we believe the Long-term Care Group Specialist education and COOL give both veteran and new sales professionals the know-how and technology to become top producers In this fast growing group insurance market.” For more information about CareQuest University’s education programs, email: info@CareQuestU.org or go to www.CareQuestU.org. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. BIG “I” RELEASES 2007 LEGISLATIVE AGENDA Agents, brokers seek progress on licensing, regulatory, tax and legal reforms, incentive compensation, flood and disaster legislation WASHINGTON, D.C., Jan. 2, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) looks to build on its successes in 2006 by advocating aggressively for a number of important legislative reforms, at both the federal and state levels, in 2007. “We made great progress on a number of fronts in 2006,” says Big “I” CEO Robert A. Rusbuldt. “The President signed into law pension and health care reform that will be of great benefit to insurance consumers. We made important progress in other critical areas as well. A unanimous House vote on H.R. 5637, the surplus lines bill, illustrates that the industry can come together and support a bipartisan targeted insurance regulatory reform approach. The House also passed H.R. 4973, a comprehensive flood bill with a number of Big ‘I’-supported provisions. The agriculture appropriations bill included a provision prohibiting federal funding for so-called ‘Premium Reduction Plans’ that would have hurt farmers and agents alike. “We also worked with key policymakers in Congress to address natural disaster coverage and to establish a more accurate depreciation schedule of intangible assets for small businesses,” Rusbuldt adds. “Additionally, we worked diligently at the state level on producer compensation, agent licensing, and natural disaster coverage. Big ‘I’ members were called to testify before Congressional committees numerous times on the most important issues facing our members. In 2007, we hope and expect to build on those successes and achieve a number of goals at both the federal and state legislative levels.” The legislative agenda for the nation’s largest insurance association this year includes the following items: Producer Licensing—The Big “I” wants all jurisdictions to issue and renew producer licenses on a truly reciprocal basis and to implement uniformity in key areas. Many states claim to have enacted reciprocity and other reforms in the early part of the decade, but that reform effort has not produced meaningful results for many agents. The Big “I” supports targeted federal legislation to streamline the licensing process and to implement uniformity. One of the association’s key objectives is to address the requirements in many states that force an insurance agent to obtain three licenses (an individual license, an entity license, and a corporate registration) before placing business in a particular jurisdiction. These duplicative requirements impose significant and unjustified costs on producers, hinder an agent’s ability to serve customers, and are a likely violation of state and federal law. The Big “I” is also developing a targeted list of reforms that will make the licensing process simpler for multi-state producers. “Agents and brokers in today’s regulatory environment face imposing licensing burdens, and our members continue to struggle with the needless logistical and bureaucratic hurdles that are in place,” says Wesley Bissett, Big “I” senior vice president for government affairs and state relations. “Insurance producers across the United States are frustrated by the current system, and they understandably want ease, efficiency, and speed in the licensing and renewal process. Significant reform is urgently needed and is long overdue.” Producer Compensation—Very few states enacted any legislation in this area in 2005 and 2006, and very little legislative activity—if any at all—is expected in 2007. The educational efforts undertaken by the Big “I” in recent years have been well-received by state legislators and helped prevent knee-jerk policy responses in the wake of the Marsh scandal, and, predictably, no state has banned the payment of incentive compensation. The Big “I” is concerned, however, that some attorneys general are usurping the authority of state regulators and legislators and using legal settlements as vehicles for imposing costly and unnecessary requirements and altogether banning forms of legal incentive compensation. “As advocates of effective insurance regulation, the Big ‘I’ strongly objects to the manner in which some attorneys general have strong-armed insurers into accepting settlement agreements. Insurers need to determine how to compensate producers for sales and service excellence,” says Debra Perkins, Big “I” executive vice president and general counsel. Insurance Regulatory Reform—The Big “I” will continue to strongly support targeted federal legislation, or “federal tools,” to reform the current state-based regulatory system without creating a federal regulator or “optional” federal charter. “Targeted reforms would retain the strengths of the existing system while improving it in the areas where it is sorely needed. The surplus lines bill was a great first step, and we hope to take the next steps in 2007, particularly in the areas of producer and company licensing. We look forward to working with the leadership in the House Financial Services Committee and the Senate Banking Committee as they continue their important work on insurance regulation,” says Charles E. Symington, Jr., Big “I” senior vice president for government affairs and federal relations. Terrorism Insurance—With the Terrorism Risk Insurance Extension Act (TRIEA) set to expire on Dec. 31, 2007, renewal or extension of a federal backstop for catastrophic terrorist acts is a top priority of the Big “I”. “We believe that the uncertainty involved in potential terrorist attacks will continue to make such events effectively uninsurable in the coming years, and as such, we believe that a federal backstop is necessary to prevent significant economic disruption,” Symington says. “We are very heartened with the recent comments by the new committee leadership in the House and the Senate who have indicated that this issue is a leading priority, and we will work closely with legislators, policyholders and companies to ensure that some form of a program remains in place after this year.” Flood Insurance Reform—The Big “I” was very pleased with the Senate Banking Committee action and House passage of the Flood Insurance Reform and Modernization (FIRM) Act in 2006, and remains committed to comprehensive reform of the National Flood Insurance Program (NFIP). “The Big ‘I’ has been a leader in flood insurance reform, and an example is the comprehensive reform package we proposed in November 2005,” Symington says. (Click here to see the Nov. 11, 2005, release.) “The new leadership in the House and Senate have indicated flood insurance reform will be a priority, and we will continue to push for needed reforms that will help ensure the solvency and effectiveness of the National Flood Insurance Program for many years, and also help consumers by providing new levels of coverage, such as business-interruption insurance, increases in the maximum coverage limits, and the inclusion of additional living expenses coverage for residential policies.” Natural Disaster Legislation—The active hurricane season of 2005 and the subsequent constraints in the insurance market reiterated the need for comprehensive natural-disaster legislation in Congress, and the 109th Congress considered four bills on the subject, including two general approaches: the creation of a federal reinsurance program and the ability of insurance companies to set aside tax-free reserves for certain catastrophic risks. “We will support any solution that allows our members to serve consumers with natural disaster coverage, whether that means a federal backstop, tax-free reserving, catastrophic savings accounts (CSAs) or some combination approach,” Symington says. “Additionally, we strongly support legislation introduced in the Senate by Sen. Bill Nelson (D-Fla.) and in the House by Reps. Debbie Wasserman Schultz (D-Fla.) and Patrick McHenry (R-N.C.) that would establish a commission to help the federal government prepare for and manage natural disaster exposures. We will work with all parties in the insurance marketplace to reach consensus on a viable solution to address this national problem.” This will also continue to be an important issue at the state level, as many states are expected to consider catastrophe-related issues. As in 2006, states are likely to look at such issues as enhanced building codes (and the enforcement of such codes) in disaster-prone areas and other ways to promote mitigation before catastrophes strike. Continued debates are expected on the need for state or regional catastrophe funds, modeled after similar funds in place in Florida and California. State regulators and the National Association of Insurance Commissioners (NAIC) have been active participants in the state and federal debate and will play an important role once again in 2007. “The Big ‘I’ continues to support legislative and regulatory efforts that return insurers to at-risk regions, restore and preserve healthy competition, encourage mitigation and effective planning, as well as other important steps to prepare communities across America for future natural disasters,” Bissett says. “We will actively promote these vital policy debates and discussions in 2007.” Crop Insurance—Independent agents and brokers will continue to oppose federal funding for Premium Reduction Plans (PRPs). The Big “I” advocated for and Congress agreed to the defunding of this program in 2006 because of various issues with PRPs that are contrary to the best interests of consumers. The United States Department of Agriculture’s Risk Management Agency (RMA) published an unprecedented interim rule allowing providers to give rebates to their customers, a provision at odds with the laws of 48 states and longstanding Federal Crop Insurance Program (FCIP) regulations prohibiting rebating. Additionally, PRP rebating would allow for rebates to be offered to farmers in some states but not others, contrary to FCIP regulations disallowing discrimination in favor of farmers in any state at the expense of farmers in other states. The funding prohibition of PRP was successfully extended in the recent Continuing Resolution passed at the conclusion of the 109th Congress, and we will work with the leaders of the 110th Congress to continue this prohibition of PRP and to eliminate the plans altogether. “PRP schemes would force insurance providers to focus on shortcuts rather than on providing reliable, quality service for farmers,” Symington says. “We will continue to fight against these types of schemes to prevent a race to the bottom among insurance providers, which would create subpar service for farmers all over America.” Tax Reform—The Big “I” supports S. 3974 and H.R. 4960, introduced in 2006, and will seek to move that legislation forward in 2007. The bills would amend the current tax code to allow a more accurate depreciation schedule for intangible assets, such as customer lists, when they are acquired in the purchase of small businesses, and to allow purchasers of eligible small businesses to write-off as much as $5 million of purchased intangibles over a five-year period, with ratable depreciation over 10 years. S. 3974 was introduced by Sens. Jim Bunning (R-Ky.) and Sen. Kent Conrad (D-N.D.), and H.R. 4960 was introduced by Reps. Eric Cantor (R-Va.) and Earl Pomeroy (D-N.D.). “We are very grateful to Sens. Bunning and Conrad, and Reps. Cantor and Pomeroy, for their work in getting these bills introduced last year,” Symington says. “Tax reform will help our members and thousands of other small businesses grow their businesses, hire more employees, and pass on their agencies to their families when they decide to retire. We will continue to support this legislation and help move it forward this year.” Data Security—Independent agents and brokers will continue to push for legislation that will address this issue while making sure any national standard is not burdensome, and enforcement of the standard is done primarily through state insurance regulators. “We also will work with carriers and vendors through the Agents Council for Technology and other advocacy outreach to assure that any new legal or regulatory requirements are implemented in ways that do not interfere with agency efficiency or necessitate inconsistent work flows for different carriers,” Perkins says. Health Care Reform—Independent agents and brokers will continue to seek increased access to health insurance to help the uninsured obtain the coverage they need. The Big “I” was heartened by enactment of the Tax Relief and Health Care Act of 2006, which includes a number of provisions designed to improve the operations of Health Savings Account (HSA) plans, and we look to build upon this legislation in the coming year. “We still face a situation in which 45 million Americans have no health-care coverage, and a solution is absolutely needed,” Symington says. “We will support legislation providing expanded health-care options, not just for the good of our members, but for all Americans.” www.independentagent.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. A.M. Best Special Report: Yield Curve Inverted by Non-U.S. Buying of Treasuries OLDWICK, N.J., Jan. 2, 2007—Despite year-end 2006 consensus forecasts that anticipate an early 2007 easing move by the Federal Reserve’s Open Market Committee to stimulate a softening U.S. economy, lower interest rates are far from a certainty. Even with weakening business activity, inflation and dollar difficulties have the potential both to frustrate a Fed easing, as well as to push long-term interest rates higher. This is particularly true given the inversion of the yield curve from heavy, non-U.S. buying of U.S. Treasury securities, according to a special report by the A.M. Best Co. Since the Federal Reserve began tightening in mid-2004, the short-term rates have moved higher by about 400 basis points, but the 10-year yield is little changed, up about 30 basis points for the same period, leading to a negatively sloped yield curve (short-term yields higher than long-term). Instead of recession fears or lack of inflation containing long-term yields, yields have been suppressed by strong demand for Treasuries from outside the United States. The ever-burgeoning U.S. trade deficit has sent a continual stream of excess U.S. dollars into global commerce. Much of that has been returned to the United States through “rest of world” buying of U.S. Treasury securities, as detailed in the accompanying graph. The numbers show roughly 87% of net Treasury debt issuance of the past four years has been funded from abroad. Herein lie the risks to the consensus forecasts of lower rates in 2007. First is inflation. The effects of the explosion in oil prices over the past year or two still are working their way into nearly all aspects of economic activity. Cartel-controlled commodity price inflation does respond readily to a weakening economy because it is not demand driven. The second risk is a sell-off in the U.S. dollar and declining willingness of investors outside the United States to hold Treasury paper. With both inflation and the dollar offering upside market pressure on interest rates, the Federal Reserve could find itself having to raise rates to defend the greenback and/or to fight inflation, despite a less-than-robust economy. The upside pressure on long-term yields could be enough to shift the yield curve to a more normal positive slope. This study is available electronically from the A.M. Best website at www.ambest.com/banks. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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