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Key Benefit Resources: (877) 907-5511, sbell@keybenefitresources.com, www.keybenefitresources.com Key Benefit Resources, LLC. custom design, create, and develop employee benefits plans and programs for Brokers, Employers, Unions, Affinity Groups as well as National and Regional Insurance Carriers. 1. Pension Status of S&P 500 Companies Significantly Improves in 2006; Other Post Employment Benefits Still Substantially Under Funded Analyst: Post Retirement Benefit Medical Coverage Should be Added to Endangered Spices List NEW YORK, April 26 /PRNewswire/ -- Boosted by the second half mini-bull market of 2006, S&P 500 pension funds produced strong market returns that reduced their under funding from $140 billion to an estimated $36 billion, Standard & Poor's announced today in its preliminary review of their 2006 Pensions & Other Post Employment Benefits Report to be released in June. The funding ratio of the S&P 500 companies is expected to increase from the 0.90 reported in 2005 to an estimated 0.98. According to S&P's preliminary data and estimates, S&P 500 defined benefit plans as a group were $36.4 billion under funded for 2006, a significant improvement from the $140.4 billion under funded position of 2005, but still in stark contrast to the $280 billion of over funding posted in 1999 at the height of the bull market. Funding improved to 97.5% in 2006 from 90.4% in 2005, but remains well below the 128.2% level in 1999. Fully funded plans increased to 82 in 2006 from 47 in 2005. "The improved position of pensions is the direct result of a healthier market in 2006, as market returns contributed $162 billion into the funds in addition to the $48 billion contributed by employers and $25 billion contributed by employees," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's and author of the upcoming report. "At this point, pensions are expected to improve in both their funding status and evaluation ratios. The analysis is based upon the expectation of slightly higher interest rates and a continued, moderate improvement in the equity markets. Based on our projections, we expect to see 2007 pensions to be fully funded on an aggregate basis by year-end." Standard & Poor's report also conducted an initial review of Other Post Employment Benefits (OPEB). Within the S&P 500, 307 companies had OPEB obligations, with the aggregate under funding in 2006 of $292.2 billion an improvement from the $320.9 billion in under funding in 2005. Funding status improved to 24.0% from 2005's 22.1%, but only represents a fraction of the pension rate of 97.5%. Combined, pension and OPEB assets set aside for issues in the S&P 500 amounted to $1,529.8 billion in 2006 to cover $1,858.4 billion in obligations, with the resulting under funding of $328.7 billion a significant improvement from the $461.3 billion under funded status of 2005. "The situation for OPEB continues to deteriorate. Only four companies were fully funded for their OPEB obligations in 2006, leaving 303 under funded. Additionally, due to the low funding rate, higher medical and prescription costs quickly pass through to the bottom line," continues Silverblatt. "In response, companies have continued to cutback on benefits by capping their annual contribution, limiting the annual increases or requiring their retirees to convert over to the Medicare system. As a post retirement benefit, medical coverage now has to be put on the endangered spices list." Standard & Poor's plans to complete and release its 2006 Pensions & Other Post Employment Benefits Report in the later part of the second quarter. The report will include a detailed listing of all S&P 500 issues along with their relevant data and history. The full report will be posted at www.marketattributes.standardandpoors.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. Doctors Outraged Over Growth Hormone Controversy Two anti-aging preventative medicine doctors say they are outraged over recent media coverage about their advocacy of prescribing human growth hormone to treat a hormone deficiency often associated with aging. DAYTONA BEACH, Fla., April 27 /PRNewswire/ -- The adult use of human growth hormone (HGH) was at the center of a recent New York Times article about the founders of the American Academy of Anti-Aging Medicine (http://worldhealth.net), Dr. Ronald Klatz M.D. and Dr. Robert Goldman M.D. Writing for the New York Times, Duff Wilson reported the two physicians to be promoting the controversial hormone as an aid to extending human life span, despite claimed reports of serious side effects. In comments to Fintan Dunne, editor of health Web site mylonglife.com, the two physicians say they are outraged by a slew of recent negative media coverage on the topic. MyLongLife.com has a special report with an in-depth examination of the HGH issue and the role of established medical and pharmaceutical interests. "There is a hidden battle going on for your right to a long, vital and healthy life," says Editor, Fintan Dunne. "Beneath the surface of this story there are hundreds of billions of dollars at stake, along with the future of medicine itself." Dunne reports that the nascent promise of the anti-aging movement, spearheaded by the American Academy of Anti-Aging Medicine, is to greatly enhance our health as we age. However, he says that is also the worst nightmare of a pharmaceutical industry bent on easing us into premature death with a plethora of profitably expensive medications. "Viewed by entrenched medical interests, the burgeoning development of anti-aging medicine is a potent threat," says Dunne. The special report on MyLonglife.com asks: Is HGH really a dangerous drug, or a proven and safe treatment for adult growth hormone deficiency? What lies behind the New York Times' reporting on these anti-aging preventative medicine surgeons? Is the public being subjected to a campaign designed to discredit the field of anti-aging medicine? Read the full story: "True Lies About Anti-Aging and Growth Hormone" http://mylonglife.com/articles/True-Lies-About-AntiAging.htm Web site: http://www.mylonglife.com/ Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. Pre-paid Funeral Scam Targets Elderly; Insurance Commissioner Steve Poizner Urges Senior Citizens and their Families to Check Their Policies Nearly 20 victims and potential victims already identified; investigators say there may be dozens more RANCHO CUCAMONGA - Insurance Commissioner Steve Poizner today alerted senior citizens and their families to make certain they or their loved ones are not victims of a pre-paid funeral scam which targeted the elderly in Southern California. A California Department of Insurance (CDI) investigation found that the former owner of Valley Funeral Home in Murrieta sold "pre-need" burial plans to senior citizens, including residents of area nursing homes, then pocketed the premiums and left her elderly clients without funeral coverage. Lee Ann Wyskiver, 55, was arrested at her home on April 5, 2007 by CDI investigators and the Escondido Police Department. Wyskiver is charged with six felony counts including Grand Theft and Financial Elder Abuse. She was booked into the Escondido jail, and bail was set at $50,000. The Riverside County District Attorney's office is prosecuting the case. Insurance Commissioner Steve Poizner called Wyskiver's actions "despicable." "The suspect specifically targeted senior citizens who were in nursing homes, swindling them out of hard-earned funds earmarked for a funeral with dignity and respect which wouldn't burden their families," said Poizner. "We don't know how many other victims may still be out there. Therefore, I urge families who have loved ones that dealt with Ms. Wyskiver to contact the Department of Insurance." According to investigators, between 1998 and 2004, Wyskiver collected nearly $20,000 from numerous elderly clients that thought they were purchasing a pre-need burial insurance policy. Pre-need or pre-paid burial insurance is a specialized form of life insurance or annuity used to fund the predetermined expenses of a funeral, cremation or burial. In some instances, the consumer was charged an additional fee to add an offered travel benefit. Ms. Wyskiver allegedly had her elderly clients complete the appropriate life insurance applications for the requested coverage and collected the quoted insurance premium. She then led each client to believe that their policies had been placed with either Forethought Life Insurance Company or Homesteader Life Insurance Company. After receiving numerous complaints against Wyskiver's funeral home, the California Department of Consumers Affairs, Cemetery and Funeral Bureau initiated an investigation in 2005 and concluded that Wyskiver had committed gross acts of negligence and fraud, and revoked her license to operate a funeral home. Valley Funeral Home went out of business but failed to notify the clients. In November 2005, the same establishment opened as Murrieta Valley Funeral and currently operates under new ownership and management. It was through the new owner that the clients discovered they did not have the previously purchased insurance policy. In addition to having a funeral home director's license, Wyskiver also had a license to sell life insurance during the time covered by the investigation. As a licensed insurance agent, Wyskiver had a duty to protect her clients under California Insurance Code section 785 which states "All insurers, brokers, agents, and others engaged in the transaction of insurance owe a prospective insured who is 65 years of age or older, a duty of honesty, good faith, and fair dealing." All of Wyskiver's victims are over the age of 65. If consumers believe they or a loved one may have victimized by Lee Ann Wyskiver, please call the California Department of Insurance Investigation Division office at 909-919-2200. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. American Equity Targeted by Minnesota Attorney General WEST DES MOINES, Iowa--(BUSINESS WIRE)--American Equity Investment Life Holding Company (NYSE:AEL), today became the target of a lawsuit filed by the Attorney General of the State of Minnesota concerning sales of deferred annuity products to Minnesota residents. The suit was brought against AEL’s primary operating subsidiary, American Equity Investment Life Insurance Company (“American Equity”). American Equity has a strong market conduct record in the State of Minnesota. American Equity had cooperated fully with the Attorney General’s requests for information from the Company, and yet was denied any opportunity to discuss the Company, products or sales practices with the Minnesota Attorney General’s office prior to the filing of its lawsuit. We strongly believe the allegations of the Attorney General are without merit. American Equity is a leader in providing products offering retirement income security to consumers who need and want them. While no one type of savings strategy is appropriate for all purchasers, American Equity’s deferred annuities can be an excellent choice for those seeking a safe money alternative for a portion of their savings. We believe that market conduct starts with sound product design. We market our products through a distribution network of licensed independent insurance agents who share our commitment to high standards in sales practices. We were among the first annuity writers to implement suitability reviews of annuity sales, and we have worked with the Minnesota Department of Commerce and the Iowa Insurance Division to help develop industry-wide standards of suitability and to educate regulators, agents and consumers about annuity products. In 2006, American Equity paid over $31.6 million in penalty-free cash benefit distributions to Minnesota residents. All products types offered by us in the State of Minnesota were reviewed and approved by the Minnesota Department of Commerce prior to sale. Further, all sales of American Equity products in every state are accompanied by clear and complete disclosures at the point of sale. The products offer substantial benefits to consumers including guaranteed principal and minimum interest, a choice among annual interest crediting strategies, tax-deferred accumulation of savings, 10% annual penalty-free withdrawal rights, enhanced withdrawal rights if the consumer enters a nursing home or becomes terminally ill, and payment of full contract value at death without penalty. www.american-equity.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. U.S. Joins Case Against HealthEssentials Solutions for Alleged False Claims Billings to Medicare WASHINGTON, April 26 /PRNewswire-USNewswire/ -- The United States has intervened in three qui tam suits accusing HealthEssentials Solutions Inc. (HES) of false claims billings to Medicare, the Justice Department announced today. Specifically, HES is accused of upcoding -- the practice of improperly assigning a diagnosis code to a patient discharge that is not supported by the medical record for the purpose of obtaining a higher level of reimbursement. Additionally, it is alleged that the Kentucky-based provider of geriatric care knowingly charged Medicare for medically unnecessary services. The three separate suits were filed in U.S. District Court in Louisville, Ky., by former employees of HES under the qui tam or whistleblower provisions of the False Claims Act. In addition to HES, the complaints name three individual defendants: HES Chief Executive Officer Michael Barr Chief Financial Officer, Norman Pfaadt; and Karen Stone, who worked in HES's billing department. The suits have since been consolidated into a single case. Under the qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Under the False Claims Act, the United States may recover three times the amount of its losses plus civil penalties. "The government's intervention in this case demonstrates the Department's continued commitment to stamp out fraudulent practices that threaten the integrity of the Medicare Trust Fund," said Assistant Attorney General Peter D. Keisler, of the Justice Department's Civil Division. The complaints state that the company's nurse practitioners provided services to federal health care program beneficiaries in nursing homes, assisted living facilities, and private homes. On its Medicare claims, HES had to select a billing code that accurately described the level of service and the location where the service was provided. The complaints allege that HES upcoded in two ways in order to obtain greater reimbursement. First, HES used higher level billing codes than appropriate based on the services actually rendered. Second, HES billed for services that were provided in an assisted living facility, improperly using billing codes that describe services provided in a patient's home. In addition to the upcoding allegation, the complaints allege that HES provided and billed for services that were not medically necessary. Medicare does not pay for services unless they are medically indicated and necessary for the health and well-being of the patient. The investigation of the allegations in the qui tam complaints was conducted by the U.S. Attorney's Office in Louisville, Ky., the Department's Civil Division, and the Office of Inspector General of the Department of Health and Human Services. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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6. Arthur J. Gallagher & Co. Acquires Melton Insurance Associates, Inc. ITASCA, Ill., April 26 /PRNewswire-FirstCall/ -- Arthur J. Gallagher & Co. (NYSE: AJG) today announced the acquisition of Melton Insurance Associates, Inc. of Odessa, Texas. Terms of the transaction were not disclosed. With roots dating back to 1954, Melton Insurance Associates, Inc. is a retail insurance broker offering risk management, commercial property, casualty and employee benefits insurance services to their Texas client base. They specialize in insurance products for the energy industries. J. Tommy Melton and his associates will continue to operate out of their current location under the direction of Michael Henthorn, South Central Regional Manager of Gallagher's Brokerage Services Retail Division. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. Workplace Benefits Association Launches Weekly Podcast. Content To Be Carried In INSURANCE NEWSCAST Cleveland, OH – 04/27/07 - - The Workplace Benefits Association announced the launch of a weekly podcast that will be available on the association website at www.workplacebenefits.org, and also included in each Monday’s INSURANCE NEWSCAST. “The frequency of companies and organizations using Podcasts is rapidly increasing. They are easy to use because you can listen to them on your desktop or you can download the mp3 file where it can be transferred to an mp3 player or CD,” said Walt Podgurski of InsuranceBroadcasting.com. If you are involved in Workplace Benefits, then the 52 messages from industry experts on a variety of topics you will receive over the next year can't help but increase your perspective and sharpen your skills. The first interview is with Jack Kwicien, Managing Partner, DAYMARK Advisors. The 10-minute interview discusses the options for a broker to enter the voluntary benefits marketplace. There is also a PowerPoint presentation that is available. Listen to the audio on your desktop! Click on the photo below. It should open up your Media Player audio dialogue box and automatically begin playing the interview. How To download the MP3 file! Right click on the photo below and choose (save target as...) option. Choose the directory you want the MP3 file saved to and click the save button. (additional information on downloading MP3 files is available at the website below.)
If the image above is not displaying correctly, or does not start the interview when clicked, please visit the online version at www.workplacebenefits.org/workplaceaudio.htm. The Members of the Workplace Benefits Association strive to bring an integrated solution for employers through a master plan that involves a standardized employer guide and checklist. This procedure ensures that no important area is overlooked while providing the flexibility for each employer and employee to create an individual solution to the financial planning puzzle. When an employer sits down with a Workplace Benefits Consultant, they embrace the power of a procedure that will bring about a total solution in a consultative manner involving an entire team of qualified and experienced professionals. Professionals can receive a complimentary 1-year membership by visiting the website at www.workplacebenefits.org. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. BMO says commodity-trading losses to dent profit TORONTO, April 27 (Reuters) - Bank of Montreal (BMO.TO: said on Friday that its second-quarter results will be stung by pretax commodity trading loss between C$350 million ($312.5 million) and C$450 million after changing conditions hurt its positions in natural gas. Canada's fourth-biggest bank, which estimates the impact between 45 Canadian cents to 55 Canadian cents a share, said the energy market, primarily natural gas, became more illiquid while volatility fell to historically low levels. The bank, which said it also changed the way it estimated the market value of the portfolio, will "reposition" it to a lower level and take less trading risk. "Ouch," UBS analyst Jason Bilodeau said in a note. "We think this raises significant questions about BMO's trading business/strategy and general risk oversight and management." Shares fell about 2 percent, or C$1.32, to C$69.95 on the Toronto Stock Exchange soon after the market opened. "These losses are particularly disappointing and were the result of decisions that didn't adequately recognize the vulnerability of the portfolio to change in market volatility," BMO Financial Group chief executive Bill Downe said on a conference call. The bank said it was not a prime broker in the United States to Amaranth Advisors LLC, a former $9.2 billion U.S. hedge fund that lost about $6.4 billion in energy trading last September. It did provide prime brokerage facilities to Amaranth's Canadian operation. The Bank of Montreal said it is conducting a review and has taken actions to reduce the likelihood of a recurrence. The traders involved are still with the company, executives said on a conference call. "In the aftermath of Hurricane Katrina, the volatility in the natural gas market increased significantly and natural gas prices increased as well. Clients wanted to lock in prices and the bank increased its book of business related to this market," Downe told analysts. "As the banks' energy trading business continued to grow, so did our position in out-of-the-money natural gas options. At the same time, while natural gas positions continued to decline, the market became increasingly illiquid, and volatility dropped to historic lows. "As a result, we have a large portfolio with significant mark to market losses at this time." The bank, which will report second-quarter results on May 23, had been expected to report a profit of C$1.33 per share, according to the mean estimate of eight analysts polled by Reuters Estimates. In the second quarter of 2006, it reported a net profit of of C$644 million, or C$1.24 a share. ($1=$1.11 Canadian) (Additional reporting by Frank Pingue in Toronto) Reporting by Susan Taylor (C) Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Barclays may face SEC action over debt trading Fri Apr 27, 2007 4:06AM EDT NEW YORK (Reuters) - The U.S. securities regulator is considering legal action against Barclays Plc over trading done while the bank's employees were serving on bankruptcy committees, according to a regulatory filing. The Securities and Exchange Commission (SEC) investigation looks into trading activity between 2002 and 2003 by a proprietary trading desk at Barclays, the bank said in a March SEC filing. A separate lawsuit filed against the bank in March by a former employee alleges that Barclays' U.S. distressed debt desk, which deals in bankrupt company bonds, traded debt after "potentially gaining nonpublic information" through bankruptcy creditor committees. The suit was filed in March by former Barclays analyst Michael Econn in the Manhattan federal court. Econn is seeking damages for alleged discrimination by Barclays because of his assistance of the SEC. Econn's supervisor at Barclays asked traders on the distressed debt desk in 2002 to join bankruptcy committees for companies in which they had investments, the suit alleges. In 2003, one such committee subpoenaed Barclays, prompting an internal investigation into the desk's trades and bankruptcy committee involvement, according to the suit. The SEC then investigated Barclays' trading and bankruptcy committee involvement and issued the bank a subpoena in June 2004, according to the suit. In March 2006, Econn testified before the SEC regarding his supervisor and the suggested suppressing of documents related to the bankrupt companies, according to the suit. Barclays and the SEC could not immediately be reached for comment. But Barclays said in its filing that it had cooperated with the SEC staff during its investigation and was in ongoing negotiations to resolve the matter. It independently addressed the practices, policies and procedures at issue in 2003, before the SEC began its probe, the bank said in the filing. It added that it does not expect the amount of any settlement with the SEC would have a significant adverse effect on its financial position or operating results. Barclays is currently in a takeover battle against a trio of banks led by Royal Bank of Scotland for Dutch bank ABN AMRO (Additional reporting by Paritosh Bansal) © Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. Generali buys top Czech insurance company By Lisa Jucca MILAN, April 26 (Reuters) - Italy's top insurer, Generali (GASI.MI: , agreed on Thursday to take a majority stake in a joint venture with a Czech group that will make it the leading sector player in central and eastern Europe. Under the deal, Generali will pay 1.1 billion euros ($1.50 billion) for a 51 percent stake in a joint venture with private group PPF that will control leading Czech insurer Ceska Pojistovna as well as Generali's assets in the region. The deal values Ceska Pojistovna at 3.6 billion euros and Generali's assets at 1.5 billion euros, the companies said in a joint statement. The new group will have 9 million customers. The newly-formed group will be the leader in the region with pro-forma premiums worth 2.6 billion euros at the end of 2006, just above Germany's Allianz (ALVG.DE: and Austria's Wiener Staedtische (WISV.VI: Milan newsroom, editing by Paul Bolding ($1=.7345 Euro) (C) Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. PMA Capital announces approval of extraordinary dividend from its run-off reinsurance business Thu Apr 26, 2007 4:02PM EDT Co announces that the Pennsylvania Insurance Department approved its request for an extraordinary dividend in the amount of $37.5 mln from its former reinsurance business, PMA Capital Insurance Company, which was placed in run-off in Nov 2003. © Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. U.S. interest in property derivatives growing NEW YORK, April 26 (Reuters) - U.S. interest in property derivatives is growing, but potential investors are still skittish about plunging into the nascent market, according to a survey by real estate services firm Jones Lang LaSalle. "No pension fund can afford to be the guinea pig," said Jere Lucey, executive vice president of Jones Lang LaSalle Inc.'s(JLL.N: Real Estate Investment Banking group. Still, many on Wall Street and in the capital markets believe the new products will allow property investors to hedge and others to expand their real estate interests. Four investment banks have been licensed by the National Council of Real Estate Investment Fiduciaries (NCREIF), which represents mostly pension fund investors, to trade derivatives that are based on the council's index. The index reflects a large pool of properties that the council's members own. Bank of America Corp.(BAC.N: , Credit Suisse (CSGN.VX: , Merrill Lynch (MER.N: and Goldman Sachs Group (GS.N: have signed three-year deals with the NCREIF to act as market-makers and provide the liquidity the market needs to thrive. The derivatives enable an investor to take a long position, if they believe the total return on a type of real estate will rise, or a short position, if they believe it will fall. Jones Lang recently completed a survey of potential investors to determine the level of interest in using derivatives. Clients surveyed include some of the largest fund managers, hedge funds, public real estate investment trusts and private property owners in the United States. "No one investor wants to be the poster child for the person who entered the market in the wrong direction early and lost a bunch," Lucey, who also heads the firm's U.S. derivatives team, told Reuters. But while U.S. respondents so far have not yet used any derivatives linked to commercial property values, they are interested. The surveyed investors said they would use derivatives to take on new real estate exposure or mitigate existing exposure. They also said the decision to use the complex investment would be made at the most senior levels of management -- either by the chief executive or the chief investment officer. The U.K. property derivatives market is more developed than its U.S. counterpart and is expected to grow to between $12 billion and $20 billion by the end of the year. "We are just beginning to see the impact property derivatives will have as a financial management tool, and if the growth in the U.S. market is anything like the U.K has experienced, we expect the use of these products in the United States to grow exponentially," Lucey said. Others also plan to offer property derivatives. In September, the Chicago Mercantile Exchange (CME.N: said it would offer U.S. commercial real estate futures and options contracts based on Global Real Analytics Commercial Real Estate Indexes. © Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. Demand, hurdles seen for U.S. property derivatives Thu Apr 26, 2007 3:56PM EDT By Lynn Adler NEW YORK, April 26 (Reuters) - The U.S. real estate industry is eager to better offset risk, but there are a number of hurdles to fully importing the property derivatives market from the United Kingdom, fund managers and executives said at a conference on Thursday. The industry would have to agree on viable benchmark indexes that best reflect the starkly different assets within both the residential and commercial real estate sectors, as well as varied geographic markets, they said at the "Real Estate Derivatives World" conference in New York. There is no clear favorite in the United States, where four property indexes have emerged as contenders to structure "total return swaps" around. Once liquidity builds, the chance to offset risk would appeal to investment and commercial banks, hedge funds and pension funds. Office tenants looking to protect against rent hikes would likely also participate. The potential is immense in the United States, where commercial real estate is valued in excess of $6 trillion and single-family residential property an added $21 trillion, according to CBRE Melody-GFI. Louis Wolfowitz, senior managing director of investment banking at Cushman & Wakefield in New York, compares the U.S. effort to a high school dance. Most possible participants hover on the sidelines waiting for someone to get the action started on an otherwise-empty dance floor. The start-up of property derivatives in the United States is going to happen, he said, but it will be "slow and kind of painful." While potential players wait for the market to deepen, they are also assessing the costs involved, said Rick Romano, portfolio manager of Prudential Real Estate Investors in Parsippany, New Jersey. Taking the high school analogy further, James Valente, managing director of Broadway Partners in New York, said there has been some dancing but it has been done in the halls and not particularly visible. He estimates there could be some 100 trades in the United States by year-end totaling around $1 billion. Volume quadrupled last year in the fledgling UK property derivatives market to $7.4 billion (3.7 billion pounds, according to CBRE Melody-GFI. The property derivatives offer a hedge against risks and income without buying or selling actual properties, the experts said. Tax, regulatory and accounting issues initially held up the development of the UK market, according to Nigel Heilpern, partner of Fried Frank in London. He contends property derivatives will be considered "mainstream" as a tool to hedge real estate exposure. In another development, Radar Logic Inc. is offering a daily price per square foot gauge for 25 major metropolitan areas based on public data, said Michael Feder, the company's chief executive. This could help commoditize a market where the properties which are the underlying assets can differ sharply from each other, unlike barrels of crude oil, for example. "There has been no equivalent of a daily spot price to place real estate in the same class as the traditionally tradable commodities such as precious metals or agricultural products," he said. (Additional reporting by Richard Leong) © Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. Banks to sue TJX over credit card security breach Tue Apr 24, 2007 6:02PM EDT BOSTON, April 24 (Reuters) - Groups representing 300 banks plan to file a class-action lawsuit against U.S. retailer TJX Cos. Inc. over a security breach involving data from millions of credit and debit cards, an industry body said on Tuesday. The lawsuit to be filed in U.S. District Court in Boston by the Massachusetts Bankers Association on Wednesday will seek at least "tens of millions of dollars" in damages, said Bruce Spitzer, a spokesman at the association. The Connecticut Bankers Association, the Maine Association of Community Banks and individual banks are joining the lawsuit as co-plaintiffs, the association said. "Our members say hot credit cards are still coming in, so we're not ready yet to assess the full extent of costs and thereby the damages," Spitzer said. "At a minimum it's going to be tens of millions of dollars." Massachusetts-based TJX (TJX.N: , which operates the T.J. Maxx and Marshalls chains, said last month that information from 45.7 million credit and debit cards was stolen in a computer security breach over 18 months through mid-January. Other information, including names, addresses and personal ID numbers for about 451,000 people who returned merchandise without a receipt, was also stolen. Preliminary estimates of the costs range up to $25 per card, the Massachusetts Bankers Association said. "Also, consumers have zero liability and banks absorb the cost for any liability that occurs and that has been happening also," said Spitzer. TJX has said it believes its computer system was accessed by an unauthorized user in July 2005, then on subsequent dates in 2005 and from mid-May 2006 to mid-January 2007. It has said that no customer data was stolen after Dec. 18, 2006. In March, six people in the Miami, Florida area were arrested in connection with the purchase of hundreds of thousands of dollars worth of gift cards from Wal-Mart Stores Inc. and Sam's Club with credit and debit cards suspected of coming from the TJX breach, according to media reports. In response to the security lapse, Massachusetts lawmakers are considering a bill that would make retailers such as TJX and other companies liable when hackers breach their security systems and steal credit card data. Reporting by Jason Szep, editing by Ted Kerr (C) Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Prime Health Services Unleashes Innovative Solution for Comprehensive Medical Repricing Renovo System Delivers an Innovative, Comprehensive, and Interactive Repricing Tool NASHVILLE, Tenn.--(BUSINESS WIRE)--Prime Health Services (Prime Health), a National Preferred Provider Organization (PPO), unleashes a revolutionary Group Health medical repricing system to expedite the entire repricing process. “The advanced technology of Renovo System maximizes the efficiency of a server connection combined with continuous access to a global database of network providers,” said Brian Sharp, President/CEO of Prime Health Services. “The Renovo System management features a streamline repricing function, custom invoicing, and reporting which contributes to its innovative solution to medical repricing. It also provides us with a valuable tool to place the Prime Health Services PPO network in the hands of our clients via a repricing tool that is state of the art.” Never has medical repricing software been so comprehensive and easy to use. “"We are very pleased with Renovo; the system has a user-friendly interface with quick response time in comparison with similar applications,” said Cecilia Gamwell, National Healthcare Solutions. “Our processing team is very pleased with the functionality and immediate pricing results the system provides.” www.primehealthservices.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. A Unique Business Model Enables Benepath to Serve Its Customers Better NEWTOWN SQUARE, Pa.--(BUSINESS WIRE)--Benepath developed a new business model within the insurance industry to meet the needs of individuals and businesses in need of health insurance coverage. Benepath, Inc., a leading health insurance provider in the Mid-Atlantic region, has recently implemented a unique business model in the insurance industry to better serve individuals and businesses seeking health insurance coverage. Benepath’s distributed workforce model allows them to employ local insurance benefit consultants who are knowledgeable about the regional health insurance options as well as critical issues like knowing the top hospitals and if they are in the recommend health plans. The staff also assists consumers by answering questions, explaining benefit options, helping with plan comparisons and assisting with the application process. Anyone in Pennsylvania, Delaware, or Maryland who needs health insurance coverage can visit http://www.benepath.com to receive instant quotes at any time or can call 888-423-6437 to speak with a health insurance advisor. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Securian Applies Experience and Client Research To New Debt Protection Products ST. PAUL, Minn., April 26 /PRNewswire/ -- Securian Financial Group has unveiled its new suite of debt protection products designed to meet today's lending needs. The products are a result of Securian's experience in the marketplace as well as client research conducted throughout 2006. "We were one of the first to market with debt protection programs for consumer loans, and we continue to innovate," said John Gibbons, National Sales Consultant. "We possess a deep understanding of this business and make it a priority to focus on the business of our clients -- lending. The flexibility of debt protection truly presents the best framework for protecting today's varied loan types." The new line-up includes seven turn-key products, designed to fit each loan type. In addition to the new turn-key programs, Securian continues to offer customized debt protection products to meet unique business needs. www.securian.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. SHRM Secures Key Provisions in Genetic Nondiscrimination Legislation ALEXANDRIA, Va., April 26 /PRNewswire-USNewswire/ -- The Society for Human Resource Management (SHRM) helped earn approval of several improvements to H.R. 493, the Genetic Information Nondiscrimination Act of 2007 (GINA), which the U.S. House of Representatives passed yesterday. These new provisions will appropriately narrow the scope of the bill and improve the law's impact on employees and employers. However, SHRM remains concerned with a number of other aspects of the legislation. H.R. 493 would prohibit discrimination in health insurance and employment matters on the basis of an individual's genetic history. SHRM, a member of the Genetic Information Nondiscrimination in Employment (GINE) Coalition, staunchly supports genetic nondiscrimination and worked closely with legislators as it progressed through the House. "SHRM believes employees should be judged on their performance, not on their family history of genetic disorders," said SHRM President and CEO Susan R. Meisinger, SPHR. "We will continue to work with the Congress and the Administration to prohibit genetic discrimination and balance the needs of both employees and their employers." Specifically, SHRM worked to ensure the bill's proposal to regulate genetic information and testing was consistent with requirements for regulating health information under the Americans with Disabilities Act. SHRM also recommended limiting the bill's overly broad definition of "family member" to any individual related by blood within four generations. Finally, the House-passed bill excluded any semblance of a federal mandate that would require that employers offer health plans covering all treatments for genetic related conditions. However, SHRM has raised concerns about several aspects of the version of H.R. 493 that passed the House. For instance, the bill will prevent employers from making business decisions about unintended consequences under H.R. 493, such as barring employers from making inquiries necessary to protect public health. Thus, SHRM believes the House-passed bill includes some provisions that would create significant implementation problems for HR professionals. SHRM and the GINE Coalition will work to correct these issues in the Senate or through final legislation. SHRM, as part of the GINE Coalition, submitted its recommendations to strengthen the legislation in a letter to House Speaker Nancy Pelosi (D-CA) and House Minority Leader John Boehner (R-OH) on April 10, 2007. The full text of SHRM's letter can be found at http://www.shrm.org/government. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Lieberman, Blunt Address Big “I” Legislative Conference Elected leaders discuss policy concerns, insurance and small business issues WASHINGTON, D.C., April 26, 2007—Sen. Joe Lieberman (ID-Conn.) and House Republican Whip Roy Blunt (R-Mo.) addressed 1,400 independent insurance agents and brokers at the Independent Insurance Agents & Brokers of America’s (the Big “I”) National Legislative Conference & Convention this morning. Sen. Lieberman emphasized the importance of the Terrorism Risk Insurance Act (TRIA). “It is not only time to extend TRIA; it is time to make it permanent,” announced Lieberman. He also said the backstop should be expanded to cover nuclear, biological and chemical attacks. Lieberman highlighted the importance of choice--whether it is a choice of insurance products or a choice of political ideas. The Independent Senator joked, “I feel right at home with the independent agents.” He went on to talk about his frustration with partisan politics in Washington and the need for the parties to compromise on important issues. “We need to come together to adopt American ideas, and American solutions,” he said. Blunt also stressed his support for the extension of TRIA, including a backstop for group life insurance. He touched on a number of other topics as well, including the House vote this week on funding for the Iraq War. “Congress should not be micromanaging the war,” said Blunt. “The right of Congress is to decide whether we go (to war) or not---not the conditions in the field.” Blunt also addressed the value of small businesses---including independent insurance agencies---to the economy. He reflected on the current tax system and how it is a good climate for small business, and should not be changed by the new Congress. Blunt said keeping taxes low is “trusting the American people with their money and how to spend it, rather than trusting the government with people’s money.” www.independentagent.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. Article Examines Managed Medicaid's Critical Success Factors NEW YORK April 26, 2007—Standard & Poor's Ratings Services has published a report which shows that Medicaid is proving to be a sound business line for managed care organizations (MCOs). However, there are risks because Medicaid and its MCO partners face additional hazards relative to commercial health insurance programs because they serve society's most indigent and fragile members. The article, titled "Managed Medicaid's Critical Success Factors," also states that although Medicaid is seen as a growth area for specialty companies and a good diversification for commercial or Medicare MCOs, Standard & Poor's does not see it as the solution to the problem of rising Medicaid costs. "Managed care companies cannot contain costs and maintain profitability without a satisfied participatory provider base (those being hospitals or physicians providing the services)," noted Standard & Poor's credit analyst Shellie Stoddard. "Appropriate reimbursement levels for managed care organizations and providers raise highly political issues and represent significant business risks for managed care companies in the Medicaid market." www.ratingsdirect.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. Anthem Blue Cross and Blue Shield Associates Pledge More Than $2 Million to Hundreds of Non-Profit Organizations in 2006 Over the next three years, company philanthropy to focus on increasing access to the uninsured INDIANAPOLIS -- Anthem Blue Cross and Blue Shield continued its 60-year commitment to the health of Indiana's communities by contributing more than $2 million dollars to 475 different non-profit groups across the state last year, earning recognition as one of the "Top 12" corporate donors by the United Way of Central Indiana. Through Anthem Blue Cross and Blue Shield's Associate Giving Campaign, associates directed their pledges to any 501(c)(3) organization, and the company's charitable foundation provided a 50 percent match. This week marks National Cover the Uninsured Week. In January, Anthem unveiled a plan that includes a financial commitment from the company's charitable foundation of $30 million over the next three years to support community and state-based programs related to the company's uninsured initiatives across the country. In addition to the personal donations from Anthem's 3,600 Indiana associates, the company and its charitable foundation gave nearly $4.4 million in grants to health-related organizations in Indiana in 2006. www.anthem.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. Abu Dhabi And Omani Insurance Markets Offer Significant Development Potential, Say S&P Reports LONDON April 23, 2007--The Abu Dhabi and Omani insurance markets offer significant development potential, according to two reports ("Abu Dhabi's Insurance Market: A Healthy Industry Facing Challenges?" and "Insurance In The Sultanate of Oman Benefits From Good Regulation And Steady Growth") published today by Standard & Poor's Ratings Services. Abu Dhabi insurers have a long track record of sound earnings generated from their risk management skills. To some extent, however, this is due to their role as risk handlers for the international insurance market. "Because the risk values handled are so large, it is impossible for any one company, worldwide, to take such a large risk line, so reinsurance has been a key feature of the market," said Standard & Poor's credit analyst Kevin Willis. The outlook for the Gulf Cooperation Council (GCC) insurance markets and increasing involvement of international insurers in the region will be discussed in greater detail by Kevin Willis at Standard & Poor's inaugural GCC conference, "Supporting The Development Of Middle East Financial Markets," which will take place in Dubai on April 24, 2007. CONFERENCE DETAILS Our full-day, complimentary GCC conference will take place at the Jumeirah Beach Resort Hotel in Dubai and starts at 8.30 a.m. The event will feature a keynote speech by Dr. Nasser Saidi, chief economist of the Dubai International Financial Centre, and presentations by senior Standard & Poor's executives and analysts on a range of activities, issues, and challenges critical to the future of markets, investors, and issuers in the region. As well as examining credit trends among insurers, banks, and the corporate sector, our analysts will be discussing the outlook for Islamic finance and asset-backed structured finance in the Middle East, exploring risk management issues in light of Basel II, and discussing regional fund management. To read a full agenda for the event--and also to access various GCC research articles, including our credit survey on the region--please visit www.middleeast.standardandpoors.com. If you wish to attend the event, please contact Tracey Brew on (44) 20-7176-3729 or tracey_brew@standardandpoors.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. Change In Application Of Notching Criteria To "Narrow Earnings Test" FI Hybrids LONDON April 23, 2007--Standard & Poor's Ratings Services today announced a change in the application of its notching criteria for certain hybrids. These instruments contain "narrow earnings tests", which link the payment of a coupon to the existence of profits in the previous financial year. For investment-grade issuers, Standard & Poor's previously rated these instruments three notches below the issuer's senior debt rating, but Standard & Poor's will now typically assign a rating two notches below the issuer's senior debt rating. This change has led to the upgrade of several existing hybrid issues in Spain and Australia. (Please see separate research updates: ""Narrow Earnings Test" Spanish Bank Hybrids Raised," published on April 23, 2007, and "Ratings On Various Australian Bank And Insurance Hybrids Raised," published on April 20, 2007.) www.standardandpoors.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
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