Daily Quote: "You can't hold a man down without staying down with him." - - Booker T. Washington 1. Agents for Change Praises Senators Sununu and Johnson for Reintroducing Optional Federal Charter Legislation May 24, 2007 Agents for Change strongly commends Senators Tim Johnson (D-SD) and John Sununu (R-NH) for reintroducing legislation to create an optional federal charter (OFC). “Very simply, an OFC will help producers better serve their customers,” said Robert Poli, Chairman of Agents for Change. Producers continue to run into roadblocks – imposing licensing burdens, logistical and bureaucratic hurdles, a lack of speed to market of new products, and excessive costs. In order to sell in more than one state, insurance producers have to navigate through separate state insurance regulations and obtain a separate insurance license in each state. Additionally, because of the current Byzantine state rules insurance products are oftentimes not available to all consumers. The current state based regulatory system burdens producers and consumers alike. “Consumers are frustrated with the lack of choice among insurance products and coverage in the current system,” continued Poli. “They don’t understand why I can not continue to serve them – many of my customers view me as a trusted financial advisor – if they move to a state where I am not licensed. Similarly, they do not understand why I can sell a product in one state but not another. This makes no sense in the 21st century.” Consumers will have access to more products and may save money due to increased efficiencies in regulation made available by an OFC. Producers will spend less time on paperwork and have more time to better serve their customers. Poli continued, “it is very important to note that the first word in OFC is ‘optional’ - we are not advocating the abolishment of the state based insurance regulatory system nor would we support a federal system with weak consumer protections. We simply want to give producers the choice to opt into a modern federal regulatory system if it makes sense for their business models and their customers.” An OFC will decrease bureaucracy for producers and better protect consumers by mandating consistent consumer protections across state lines. At its core, this issue is about choice and competition. It is the best public policy solution to remedy the current inefficiencies in the insurance marketplace and it is a win-win for anyone who buys or sells an insurance product. Agents for Change is a trade association of insurance agents and brokers from across all lines of insurance. Members of Agents for Change offer expert advice to public policy makers as they move forward to enact an optional federal charter to allow producers the option of being regulated at either the federal or the state level. Agents for Change has 4,000 members nationwide. www.agents4change.net Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 2. ABIA AND ABA Support Optional Federal Charter Legislation Proposed In The Senate Legislation strengthens American competitiveness in insurance markets WASHINGTON, May 24 - The American Bankers Insurance Association and American Bankers Association commended Sens. John Sununu and Tim Johnson for introducing legislation today to reform insurance regulation through the creation of an optional federal insurance charter. “The Sununu-Johnson bill represents much-needed reform of insurance regulation that Congress must pass to meet the needs of consumers, insurers, agents and the nation.” said Kevin McKechnie executive director of ABIA. “This legislation will strengthen America’s global competitiveness by allowing insurance companies and agents to better serve their policyholders by creating a national insurance regulatory structure.” The measure ties into the financial services competitiveness agenda, as highlighted in the recent Schumer/Bloomberg and the U.S. Chamber’s Capital Markets Commission reports. Both reports call an optional federal charter an important part of improving competitiveness in the financial services industry and detail the need to improve the current insurance regulatory system through greater efficiencies. Under current law, insurance providers must follow differing—sometimes conflicting—regulations in each state in which they operate. Insurers face obstacles such as inconsistent regulations, barriers to innovation and conflicting agent licensing and education requirements, among others. All of these factors drive up the price of products and slow down innovation and delivery of new products to consumers. “Inefficiencies built into the present state-by-state regulatory structure serve to prevent many companies and agents from fully meeting the financial needs of their policyholders,” said McKechnie ABIA and ABA are members of the Optional Federal Charter Coalition. The OFCC represents a large coalition of trade associations united to promote a modernized insurance regulatory system. Other members include Agents for Change, American Council of Life Insurers, American Insurance Association, The Council of Insurance Agents and Brokers, The Financial Services Forum, The Financial Services Roundtable, the Life Insurers Council, the National Association of Independent Life Brokerage Agencies and the Reinsurance Association of America. www.aba.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 3. The Council Applauds Introduction Of Optional Federal Charter Legislation WASHINGTON – The Council of Insurance Agents & Brokers today praised Sens. Tim Johnson, D-S.D., and John Sununu, R-NH, for introducing legislation to provide an optional federal charter for property/casualty and life insurers, giving the insurance sector the same right to choose its regulator as is now afforded to banks. Sununu introduced the legislation today on behalf of himself and Sen. Tim Johnson, D-S.D., who is recovering from a serious medical condition and has not yet returned to the Senate. The two senators also introduced the optional federal charter legislation last year. Council President Ken A. Crerar said the optional federal charter “simply makes sense.” “At a time when more companies are operating in multiple states and when international business is becoming an important part of the insurance market, having the ability to be regulated at a federal level simply makes sense,” Crerar said. “It is time to recognize that industry players need to be able to choose which type of regulation, state or federal, suits their business plan best.” Crerar noted that the Johnson-Sununu legislation would make federal regulation voluntary and strictly a matter of choice. “Nothing is mandatory,” he said. “The dual regulator system has worked well for banks, and it will work well for insurance. The Council looks forward to working with Sens. Johnson and Sununu and lawmakers from both parties on both sides of the Capitol to enact this important legislation.” Crerar also commended the senators for recognizing the uniqueness of the surplus lines market and for incorporating a much needed surplus lines reform by specifying that premium taxes on surplus lines business be paid to the state where the company is headquartered. The Council represents the leading domestic and international commercial insurance brokers who annually place more than 80 percent of the commercial property/casualty premiums in the United States and administer billions of dollars in employee benefit accounts. Crerar said if the United States hopes to be successful in pressing its case for open markets and free trade overseas, it must have uniformity and consistency in the regulatory environment of the 50 states. In addition, he said, an optional federal charter would significantly improve the ability of regulators to monitor the solvency and financial stability of insurers. “Fundamentally, insurance is a promise between the customer and the company, a promise to pay if a claim is incurred. That promise means nothing if the company extending coverage is not financially sound,” he said. “Safety and soundness in a global marketplace can best be assured through a rational regulatory regime.” www.ciab.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 4. Big “I” Opposes Optional Federal Charter Bill Independent Agents seek modernization and reform of regulatory system via targeted federal legislation WASHINGTON, D.C., May 24, 2007—The Independent Insurance Agents & Brokers of America (the Big “I”) opposes S.40, the National Insurance Act of 2007 (NIA), introduced today by Sen. John Sununu (R-N.H.) and Sen. Tim Johnson (D-S.D.). Rather than creating a massive new federal bureaucracy under an Optional Federal Charter (OFC) bill, the Big I instead supports targeted federal legislation to reform the state insurance regulatory system, which relies on the over 100 years of skill and experience of states as insurance regulators. An example of such a pragmatic approach is S.929, the Nonadmitted and Reinsurance Reform Act introduced by Sen. Mel Martinez (R-FL) and Sen. Bill Nelson (D-FL), which would help create uniformity in the surplus lines and reinsurance markets. “There is no question in the insurance market that the existing regulatory system needs to be reformed,” says Charles E. Symington Jr., Big “I” senior vice president for government affairs and federal relations. “Change is overdue, and virtually every industry stakeholder agrees the existing system can be slow, inefficient, and duplicative. The Big “I” agrees with the need to update the regulatory system, but a one-size-fits-all scheme that creates a new federal bureaucracy is not the answer.” The Big “I” is among the leaders in advocating reform of state insurance regulation. Although the need for greater efficiency and uniformity is clear, IIABA believes optional federal chartering, federal regulation and the creation of a new federal bureaucracy go too far. The Big “I” has many reasons for opposing OFC, including: Local insurance regulation works best for consumers and the state system ensures a level of responsiveness to consumers that could not be matched at the federal level. The dual state/federal system established by the NIA would be confusing to consumers and could create coverage gaps. While addressing some of our members’ licensing concerns, the Big “I” believes the NIA would lead to additional regulatory burdens on agents and brokers and would negatively impact our members’ ability to represent their customers by establishing a distant federal regulator in Washington, D.C. By eliminating or drastically limiting regulatory review of policy language for the small commercial and personal lines markets, the NIA would leave consumers unprotected. The dual structure established by the NIA could have disastrous implications for solvency regulation by largely bifurcating this key regulatory function from guaranty fund protection. The NIA would negatively impact revenue through a loss of licensing fees and could threaten state premium tax revenue – critical funding heavily relied upon by the states for various purposes. “OFC would substitute a dual, federal/state patchwork of regulation for the existing state-by-state system, which would heighten, rather than diminish, regulatory burdens on our membership and create confusion for the customers we serve,” says Tom Koonce, Big “I” assistant vice president for government affairs and federal relations. “A new federal regulator located in Washington, D.C. brings a host of new problems to the table, including unresponsiveness to market differences among the states. The solution to modernizing insurance regulation is to reform the state-based system through targeted federal legislation, not the creation of a cumbersome federal bureaucracy.” IIABA advocates for a pragmatic, middle-ground approach that uses targeted federal legislation to improve state insurance regulation by creating a more uniform and streamlined regulatory system. This approach would overcome state-level impediments to reform and build on, rather than dismantle, the states’ inherent strengths—diversity, geographical uniqueness, innovation and responsiveness to consumers—to meet the challenges of a rapidly changing insurance marketplace. “Targeted reform of the state-based system such as the Nonadmitted and Reinsurance Reform Act which has been introduced in both the Senate and the House is the appropriate remedy for the marketplace’s problems, and is the only solution that has gained broad industry and bipartisan support,” Symington says. “In fact, this bill passed the House overwhelmingly last year by an astounding 417-0 vote. The Big “I” hopes that industry participants will support this approach to much-needed reform that will benefit consumers now, “Symington concluded. “Clearly, speed to market, agent and company licensing, market freedom and other insurance regulatory concerns can be addressed efficiently and more expeditiously under this approach than under the creation of a new federal bureaucracy. www.independentagent.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 5. NAMIC: Optional Federal Charter Would Hurt Consumers and Insurers WASHINGTON (May 24, 2007) — The National Association of Mutual Insurance Companies (NAMIC) today announced its strong opposition to The National Insurance Act of 2007, which would bring the federal government into the insurance regulatory system. NAMIC contends the bill would hurt consumers and insurers, especially small- and medium-sized carriers that comprise the bulk of the insurance industry. “In addition to being completely unnecessary, this bill would likely lead to additional bureaucracy for insurers and, ultimately, higher prices for consumers,” said Justin Roth, NAMIC’s senior federal affairs director. The bill, introduced by Sens. Tim Johnson, D-S.D., and John E. Sununu, R-N.H., would establish an optional federal charter, allowing insurance companies to choose to be regulated by a newly created federal insurance regulatory authority instead of by state insurance departments pursuant to state law. Property/casualty insurers have always been regulated by the states in which they do business. Congress recognized the importance of maintaining state regulation over the business of insurance by adopting the McCarran-Ferguson Act in 1945, which cemented states’ authority. NAMIC maintains that creating federal regulation would only produce another level of bureaucracy for insurers and their policyholders. The measure does not have strong support within the insurance industry. “It makes little sense to introduce legislation that would create a system that the vast majority of companies and agents in the property/casualty world strongly oppose,” Roth said. Specifically, NAMIC opposes an OFC for the following reasons: Different states are prone to different natural perils — such as hurricanes, tornadoes and earthquakes — and people in states without them should not have to pay for people in states with them. Moreover, the relevant states understand the risks of these perils far better than the federal government. Despite proponents’ intentions that it would simply create an alternative regulatory scheme, an OFC would most likely result in dual regulation by the federal and state governments, as evidenced by the banking industry. While banks can choose either a federal or state charter, all banks are subject to some regulation by the FDIC. Congress could well decide, in the context of an OFC, to replace the state guaranty funds with a federal insurer similar to FDIC. It would likely cause increased costs and bureaucracy, since the federal government would regulate most aspects of the insurance business while the states would regulate guaranty funds. Insurers would, therefore, have to comply with the rules of multiple regulators — even if they opt to remain under state authority. Small insurers would be at a distinct disadvantage. Large, federally regulated insurers would be allowed to bypass all state regulations such as price controls, consumer protections and market conduct examinations. “While we acknowledge that the current regulatory system must be reformed, we think that those reforms can take place at the state level rather then creating an additional layer of federal bureaucracy that the insurance industry and their consumers would have to deal with,” Roth said. “In fact, 17 states have adopted regulatory reforms in the last four years. Congress can play a meaningful role in helping to modernize insurance regulation while not adding additional regulation at either the state or federal level.” www.namic.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article
Key Benefit Resources: (877) 907-5511, sbell@keybenefitresources.com, www.keybenefitresources.com 6. Scor to contest Allianz's 9/11 WTC settlement PARIS, May 24 (Reuters) - French reinsurer Scor (SCOR.PA: said on Thursday it would challenge German insurer Allianz's (ALVG.DE: insurance settlement concerning the Sept. 11 2001 attacks on the World Trade Center and would seek arbitration. On May 23 seven insurers agreed to pay out an additional $2 billion on the destruction of the World Trade Center, resolving all outstanding claims from the attacks and helping speed up the redevelopment of the site. The insurers included Allianz, Employers Insurance Co. of Wausau, Royal Indemnity Co., Swiss Re (RUKN.VX: and its Industrial Risk Insurers affiliate, The Travelers Cos. Inc. (TRV.N: and Zurich Financial Services AG (ZURN.VX: . However, Scor said the settlement did not respect a reinsurance contract it has with Allianz. “Scor considers that the Allianz settlement agreement does not respect the terms and conditions of the certificate of reinsurance between Scor and Allianz," it said in a statement. "Scor has already informed Allianz that this settlement exceeds the contractual requirements and contains ex gratia elements." "Under the terms of the clause set out in the certificate of reinsurance, Scor has requested that this case be referred to arbitration." Reporting by Sudip Kar-Gupta; editing by Greg Mahlich; © Reuters 2006. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 7. RAA Applauds Introduction Of Optional Federal Charter Bill Washington, DC - (May 24, 2007) – Citing the need to modernize the regulatory structure in the United States to reflect the global nature of the reinsurance business, the Reinsurance Association of America (RAA), applauded the introduction of Senate Bill 40, introduced today by Senators John Sununu (R-NH) and Tim Johnson (D-SD). The proposed legislation provides for a single national framework for reinsurance regulation. “Senators Sununu and Johnson are to be commended for their leadership on this issue,” said RAA President Franklin W. Nutter. “Reinsurance regulation needs to be harmonized with the global structure of reinsurance regulatory transactions,” Nutter explained. “An appropriate reinsurance regulatory structure should include a single regulator for reinsurance with national regulatory oversight to achieve uniformity of regulation within the U.S.” Nutter further noted that a critical feature of the bill is the single regulator’s authority to achieve bilateral regulatory arrangements with foreign countries that would provide for recognition and enforcement of substantially equivalent regulatory standards and enforcement in other regulatory jurisdictions. According to Nutter, bilateral recognition will allow U.S. and non-U.S. reinsurers alike to conduct trans-border business relying on the home country’s regulation. He stressed, “This can best be achieved through federal legislation. The RAA looks forward to working with the U.S. Congress to ensure reinsurers’ issues are addressed and comprehensive reform is achieved.” The RAA is a member of the Optional Federal Charter Coalition, a diverse group advocating a modernized insurance regulatory system through enactment of federal legislation and an optional federal charter. The Reinsurance Association of America has been the voice of the reinsurance industry since 1968. Headquartered in Washington, D.C., the RAA is a non-profit association committed to an activist agenda that represents the interests of reinsurance professionals across the United States. RAA membership is diverse, including large and small, broker and direct, U.S. companies and U.S. subsidiaries of foreign companies. Together, RAA members write nearly two-thirds of the gross reinsurance coverage provided by U.S. property and casualty reinsurers and affiliates. www.reinsurance.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 8. Court Approves $6.8 Million Settlement with State Farm Insurance for Screen Damage from Hurricanes Katrina and Wilma, According to Lee & Amtzis BOCA RATON, Fla.--(BUSINESS WIRE)--A Broward County, Florida Court has approved a class action settlement on behalf of more than 12,000 State Farm Florida Insurance policyholders in Florida who will receive 100 percent of the damages they requested in a $6.8 million settlement of claims filed last year in which they alleged State Farm refused to pay replacement costs of screen enclosures damaged by Hurricanes Katrina and Wilma, attorneys for the plaintiffs announced today. State Farm depreciated the cost of screen enclosures damaged by the hurricanes, allowing it to pay significant discounts to replace the screens. Attorneys for the plaintiffs at Lee & Amtzis and Kopelman & Blankman had argued that State Farm’s policy directly contravened the language of the policyholders’ agreements. “The settlement approved by the court is significant in that more than 12,000 State Farm policyholders in Florida will be made completely whole,” said Eric Lee, lead counsel for the plaintiffs. “There have been many lawsuits against insurance companies related to hurricane damage, but few that have resulted in a complete recovery of the plaintiffs’ damages.” The lawsuit was brought by Plaintiff Jason Hammett who instituted an action in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida on February 6, 2006. Hammett brought claims on behalf of himself and all Florida homeowners who submitted claims to State Farm for damages to screening enclosures during hurricanes Katrina and Wilma in 2005. After more than a year, the parties agreed to a settlement that stipulates State Farm will: Pay more than 12,000 policyholders 100% of the damages claimed in this class action. Establish a fund of $6,788,200.00 to make payments to class members. Agree to pay the costs of administering the settlement and all attorneys’ fees and other expenses in addition to the payments to class members. Pay class members checks within 60 days after the Final Judgment has been entered (July 21, 2007). For more information about the settlement, please contact Eric Lee (561) 981-9988 lee@leeamlaw.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 9. Allstate seeks 1st Calif. rate hike in 4 years Wed May 23, 2007 4:54PM EDT NEW YORK, May 23 (Reuters) - Allstate Corp. (ALL.N: said on Wednesday it is seeking its first increase in California homeowner insurance rates in nearly four years, prompting the state's insurance commissioner to say he would draw a "line in the sand" to ensure the rates charged aren't excessive. Northbrook, Illinois-based Allstate, the largest publicly traded U.S. home and auto insurer, said a hike would reflect the "true costs" of providing insurance, including potential claims for earthquakes and other catastrophes. It has said the 2003 firestorms in southern California cost it $300 million. On May 10, Allstate said it would stop offering new homeowner and landlord coverage in California, the latest of a series of coverage cutbacks nationwide. Allstate last year estimated it had 900,000 homeowner policies in the state. Steve Poizner, the insurance commissioner, said if Allstate wins a rate hike that he deems excessive, he will seek refunds. "I am drawing a line in the sand," he said. Reporting by Jonathan Stempel, (C) Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 10. Allstate Comments on California Homeowners Insurance Rates RANCHO CORDOVA, Calif.--(BUSINESS WIRE)--Responding to statements made today by California Insurance Commissioner Steve Poizner, Allstate said the following: “The facts are that Allstate’s California homeowners insurance rates currently in place were reviewed and approved by the California Department of Insurance in 2003, and our policies are competitively priced,” said Rich Halberg, Allstate spokesman for the company’s California Region. ”In fact, more than 50,000 Californians chose Allstate for new homeowners insurance policies in 2006, attracted by the value and competitive price of our policies. “Allstate is seeking a rate increase for homeowners insurance in California – the first in almost four years – so that the company will be in a strong position to help meet the needs of policyholders in California over the long term. This rate increase would reflect the true costs of providing homeowners insurance in the state, including the cost of potential assessments from the California Earthquake Authority and the costs of reinsurance contracts, which help to provide added protection by diversifying catastrophe risk. “We look forward to our hearing before the department so that we can present the facts about our rates and California’s catastrophe risk in an impartial and fair proceeding,” concluded Halberg. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 11. 36 Million Licensed Americans Unfit To Drive According to GMAC Insurance Study ST. LOUIS, MO UNITED STATES 05/23/2007 Failure Rates Double in 3rd Annual GMAC Insurance National Drivers Test ST. LOUIS, May 24 /PRNewswire/ -- Results from the 2007 GMAC Insurance National Drivers Test indicate that one in six drivers on the road -- roughly 36 million licensed Americans -- would not pass their written DMV exam if taken today. The third annual survey by GMAC Insurance gauges driver knowledge of the rules of the road by testing licensed Americans on actual questions from state DMV license exams. According to this year's results, New York drivers ousted Rhode Island by ranking last in all 50 states and the District of Columbia on driver knowledge. Idaho, on the other hand, topped the list and dethroned Oregon's tenure at first place as the most knowledgeable drivers in the UnitedStates. While the national average score was 77.1 percent, New Yorkers had an average of 71 percent and the highest failure rates (36 percent); Idaho had an average score of 81.7 percent. In general, geographical regions ranked similarly to previous years, with Arkansas, Minnesota, Kansas and Wisconsin ranking in the top five and New Jersey, Washington, DC, Massachusetts and Rhode Island in the bottom five among all states. "All Americans need a refresher course when it comes to basic driving rules," said Gary Kusumi, CEO and president, GMAC Insurance – Personal Lines. "Being a safe driver is about conduct, judgment and knowledge. We're hoping this year's results encourage people to arm themselves with the knowledge they need to stay safe." Think you're smarter than the average driver? GMAC Insurance encourages the public to take the test at http://www.gmacinsurance.com. Compare your score to the national average, see how your state ranked in previous years, challenge a friend to test their skills and brush up on safe driving tips. For more information about GMAC Insurance coverage and to find a local independent agent, call 1-888-406-6276, or visit http://www.gmacinsurance.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 12. Insurers Globally Address A Possible Increase In Weather-Related Catastrophes, Article Says NEW YORK May 22, 2007--For the insurance industry, climate's impact isn't just a theoretical concern for the future, according to an article published today by Standard & Poor's Ratings Services. The article, which is titled "Insurers Seek To Weather Changes In The Weather," says that over the past few years, extreme weather worldwide points to a possibility that a warming global climate trend might increase the likelihood of catastrophic weather events. Of course, that could mean increased catastrophe losses for insurers, reinsurers, and investors in sidecars and natural catastrophe bonds. In response, insurers and reinsurers are already changing how they manage the catastrophe risk in their portfolios, and investors are changing the way they assess these risks. Scientists generally attribute the past few years' strong increase in catastrophic weather activity (notwithstanding 2006's unexpectedly calm U.S. hurricane season) to the sea surface temperature cycle's current warm phase. These alternating warm and cold cycles last between 20 and 50 years. Warm phases are known to correlate strongly with high cyclone or hurricane activity. As the current warm phase began in 1995, at least another 10 years of potentially extreme weather conditions might remain, which could result in increased costs to the insurance industry. The 2004 and 2005 U.S. hurricane seasons, each of which contained four severe catastrophic storms, were truly wake-up calls for the insurance industry. In 2004, four major hurricanes hit Florida. In the following year, four even more devastating storms hit, including Katrina, which itself resulted in higher insured losses from one event than any other natural catastrophe on record. The unprecedented losses from all of these storms forced insurers, reinsurers, and the modeling firms with which they consult to reassess their assumptions when modeling weather-related risk in the Atlantic basin and refine models to estimate and mitigate that risk more effectively. To help mitigate their risk, risk-transfer vehicles for insurers came into prominence. Sidecars and risk-transfer securitization instruments--such as catastrophe bonds and industry loss warranties--all saw marked increases in issuance and use. These instruments, all of which are largely funded by the capital markets, provide capacity while shielding issuers and sponsors from the risk's direct financial impact. www.ratingsdirect.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 13. MetLife Advice Program Reaches Milestones - Workplace Benefits Key to Maximizing Employer Recruiting and Retention Objectives - NEW YORK, May 22, 2007 – The MetLife Advice Program, the no-cost, add-on components available to employers looking to provide financial guidance to employees, in conjunction with their existing benefits package from MetLife, announced key milestones for its comprehensive program. To date, over 1,000 clients have signed up for MetLife Advice, serving 6.6 million employees. In particular, MetLife Advice has introduced 262 dedicated Financial Services Representatives as Trusted Advisors to nearly 153 companies at 350 locations across the country. This value-added service provides an additional resource to human resources and benefits staff by providing a financial services professional who understands the client's benefit plans to help their employees better appreciate their group benefits offering. According to the fifth annual MetLife Employee Benefits Trends Study, for the first time in its history, over 55% of employers cited employee retention as their most important objective in assembling a benefits program, edging out controlling costs. To help meet both objectives, many companies today have turned to voluntary benefits as a solution of providing employees with additional benefits while maintaining costs. Access to a financial planner can be a valued benefit as nearly one-third of employees participating in the MetLife study said they are highly interested in the idea of meeting with an employer-provided financial planner.* “MetLife Advice is pleased to offer solutions that help employers retain employees,” states Paul Michael, vice president, MetLife Advice. “Employers have been looking toward voluntary benefits as a way of not only providing employees with access to the professional assistance many desire, but also a way of recruiting and retaining talent while maintaining cost structures. MetLife Advice has become an intricate and successful part of building these employee benefits communication channels.” The MetLife Advice program, originally launched in 1999 and enhanced in 2006, offers MetLife Advice for Employees, Financial Educations Solutions, MetLife Advice for Employees, Transition Solutions and MetLife Advice for Beneficiaries, all targeted programs to help employees understand their benefits and what financial solutions are available to them to help achieve their financial goals through one-on-one guidance. The MetLife Advice Trusted Advisor component enables MetLife to leverage individual and group benefits competencies to provide individual financial solutions through the workplace. www.metlife.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 14. 2008 HSA Cost of Living Adjustments Released Early New Jersey - 05/24/07 - - Recent HSA regulations have forced the IRS to release 2008 cost of living adjustments prior to June 1 of the preceding year. Please click on the following secure link for details and links to the regulation. http://www.flex125.com/af_site/company_info/forms/AFprHSA2008.pdf AmeriFlex 303 Fellowship Road Suite 201 Mount Laurel, NJ 08054 Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 15. Correlation trade is extreme sport for hedge funds Thu May 24, 2007 7:50AM EDT By David Wigan LONDON, May 24 (Reuters) - Hedge funds are driving a surge in demand for the riskiest credit derivatives, with winner-takes-all strategies that appear to have turned the art of investing into the financial equivalent of extreme sports. As hedge funds jostle for space in London's elite Mayfair district, intense competition has created an atmosphere in which only the highest possible returns will suffice, bankers say. While coupons on investment grade corporate bonds are routinely about 5 percent, the most radical new derivatives pay up to 60 percent on an upfront basis, in exchange for insurance against defaults on bespoke portfolios of corporate bonds. "Hedge funds are huge fans of these trades, where they can earn millions of dollars upfront," said a structured credit trader in London. "It's extremely high risk, but presumably they don't think any defaults are going to happen soon." The move into risky investments reflects a wider trend in the credit markets. Much of the focus is on so-called equity risk, in which investors offer to insure the first 3 percent of defaults on a portfolio of 100 to 150 companies. Such is the level of demand that the upfront cost of five-year equity RISK on the iTraxx index of credit default swaps has fallen in 18 months from around 26 percent of the value of the insurance to 8.6 percent. In the past month alone, the cost of these so-called correlation trades has dropped 2.1 percent. "There has been a lot of selling of protection, particularly in the five-year maturity," said Priya Shah, a structured credit analyst at Dresdner Kleinwort. "It's primarily hedge funds and is driven by people more actively looking to get extra yield." One of the most common trades, Shah said, was for funds to sell 0-3 percent protection and hedge it by buying protection on the 3-6 percent tranche or the iTraxx index. Even with the hedge in place, the trade returned an annualised 7.1 percent in the past month, Shah said. Unhedged -- selling 0-3 percent protection with no balancing purchase -- the trade returned about 18 percent on an annualised basis. The use of products such as rated equity or constant proportion portfolio insurance (CPPI) is another common way of getting equity exposure, said Jonathon Laredo, head of credit hedge fund Solent Capital. "It's the general dynamics of the market to add risk," he said. "Banks are often looking to buy protection from clients which they hedge with equity." The parties most willing to sell that protection are the hedge funds. Under the rated equity model, investors pay for a bond, for example at 8 cents on the dollar, and wait for the security to mature, when they get paid back at par. The bond references a portfolio and if there are defaults then the pay-off at maturity is impaired. "The product is another way of getting equity exposure, but instead of receiving a large upfront fee, the investor pays a small fee and hopes for a big pay-off when the bond matures. While demand for equity products has helped push spreads tighter, the rally is also explained by the strength of the market underlying correlation trades. The spread on the iTraxx Europe index was 21 basis points in recent trade, compared with about 32 basis points a year ago. As the iTraxx rallies, so do the tranches. To strip out the impact of the underlying index, dealers use the concept of correlation, a controversial measure of how the prices of individual components of a portfolio might move given various scenarios such as an individual default or bad news in a particular sector. Five-year iTraxx correlation is currently around 17 percent, the highest level for 18 months but still below the 22 percent peak seen in April 2005, before the so-called correlation crises sparked by the downgrades of U.S. automakers Ford (F.N: and General Motors (GM.N: . Correlation is a measure of idiosyncratic risk over systemic risk, and there are no agreed method of measuring it. The general principle is that if correlation is higher, idiosyncratic risk is lower, because it is less likely that an individual company will default. The downgrades of Ford and General Motors alerted the market to the threat of idiosyncratic defaults, led to a crash in correlation and caused a sharp widening on equity spreads, which are most exposed to the threat of single defaults. In the current rally, spreads have traced into record tight levels, and correlation is heading back toward its pre-May 2005 levels, though the move has been tempered by the high level of leveraged buyouts in Europe in recent months. Buyouts represent the type of idiosyncratic risk that can wreck equity trades. Still, there are many who believe there is more money to be made. "Hedge funds are piling into equity because liquidity is plentiful, and nobody is expecting defaults," said Lorenzo Isla, "They are getting paid a lot of money, and they are right to leverage high-quality assets. Having said that, the market is beginning to look very overbought." As a reminder that rewards are never far from risk, Goldman Sachs (GS.N: Morgan Stanley (MS.N: and FTI Consulting are among the many banks and advisors to have expanded their restructuring teams in anticipation that rising debt levels and interest rates will land a wave of corporate defaults. (C) Reuters 2007. All rights reserved. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 16. Mutual of Omaha Subsidiary To Acquire Lincoln’s Security Federal Bank OMAHA, Neb.--(BUSINESS WIRE)--Omaha Financial Holdings, Inc., has reached a definitive agreement to acquire Security Federal Bank, a federally chartered savings bank based in Lincoln, Neb. The transaction is expected to be completed in 120 to 150 days, subject to closing conditions and necessary approvals. The financial terms of the transaction were not disclosed. The Security Federal acquisition is the second this month announced by Omaha Financial Holdings, a banking subsidiary established this year by Mutual of Omaha. The company also recently announced an agreement to acquire Peak National Bank, a community banking company based in Golden, Colo. Founded in 1927, Security Federal specializes in real estate loans. It has two locations in Lincoln and one in Omaha. No changes are anticipated in the management or personnel at Security Federal. The Security Federal acquisition is an important step in advancing Mutual of Omaha’s banking strategy, providing a robust lending operation, said OFH President and CEO Jeff Schmid. The Security Federal acquisition is another key step in Mutual of Omaha’s banking strategy, which is to establish a network of community banks, open an Omaha-based bank on the Mutual of Omaha campus and launch a full-service internet bank, Schmid said. Mutual of Omaha formed Omaha Financial Holdings, Inc., in January of 2007 to pursue banking initiatives. Mutual of Omaha is a full-service, multi-line organization providing insurance and financial products for individuals, businesses and groups throughout the United States. For more information about Mutual of Omaha, visit www.mutualofomaha.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 17. Reservoir Capital Group Establishes Palisades Capital Advisors Bradley D. Belt Appointed Chairman of Palisades NEW YORK--(BUSINESS WIRE)--Reservoir Capital Group, L.L.C. today announced the establishment of Palisades Capital Advisors, L.L.C. (“Palisades”) and the appointment of Bradley D. Belt as its Chairman. Mr. Belt most recently served as Executive Director and CEO of the Pension Benefit Guaranty Corporation. Palisades is an advisory and investment firm with a focus on the pension, insurance, and financial services industries. The firm provides customized pension risk management and restructuring advisory services to corporate and public plan sponsors, financial intermediaries, and participant groups. The firm also develops, structures and invests in innovative products and solutions that address market needs, such as transferring or hedging pension investment and longevity risks. Palisades is based in New York, with offices in Washington, D.C. www.palisadescapadv.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 18. The Flip Side of Higher Healthcare Costs - Lower Life Insurance Premiums SAN DIEGO, May 23 /PRNewswire/ -- The dark clouds of rising healthcare costs have a silver lining. As we spend more on healthcare, we live longer. This greater life expectancy is lowering life insurance premiums for both term life and "permanent" insurance, according to the Insurance Information Institute. "Longer life expectancies are creating less risk for insurers and that allows the premiums for life insurance to drop," says Dave Lindsey, President of David Lindsey Agency, "Premiums have been dropping for the last decade, providing the Insured with the unique opportunity to replace their existing policies at market prices. This often results in extending terms or increasing face amounts for the same premiums as they are paying now." Rate reductions for the best risks have dropped to half of what they were ten years ago, according to the Insurance Information Institute. Reasons for the drop include decreased mortality rates as well as increased competition by insurance carriers. "Longer lifespan doesn't mean life insurance is now unnecessary," warns Lindsey. "Just the opposite is true. With longer life expectancy there is greater opportunity for unforeseen events to happen. It's important to remember that insurance looks at risk over the entire population. Unforeseen events happen to individuals." "People never think bad things can happen to them," says Lindsey "but life is sometimes cruel. Preparation is the best assurance your loved ones are not adversely impacted due to something unforeseen." That impact can have severe consequences, according to the Insurance Information Institute. 1 in 5 two-earner families would suffer a 40% or greater reduction in living standard if one of the earners died. A further 1 in 5 would suffer a 20% to 40% reduction in living standard. "Have your insurance reviewed by a competent insurance professional on a regular basis," advises Lindsey. http://davidlindseyinsurance.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 19. Foundation for Taxpayer and Consumer Rights: Allstate Overcharging CA Homeowners $900K a Day, $362 Average Annual Refund to Each Homeowner SANTA MONICA, Calif., May 23 /PRNewswire-USNewswire/ -- Allstate must repay its California policyholders the $326 million a year it has been overcharging homeowners, said the Foundation for Taxpayer and Consumer Rights (FTCR) in response to today's order by Insurance Commissioner Poizner requiring Allstate to justify its current premiums or refund excessive rates. SOURCE Foundation for Taxpayer and Consumer Rights. http://www.consumerwatchdog.org Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 20. 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21. Consumer Federation Applauds Commissioner Poizner's Allstate Order Company owes refunds to overcharged homeowners SAN MATEO, Calif., May 23 /PRNewswire-USNewswire/ -- The Consumer ederation of California today applauded Insurance Commissioner Steve oizner's order against Allstate for overcharging Californians for homeowners insurance. Commissioner Poizner ordered Allstate to prove that their rates are not excessive and stated that he would order retroactive refunds to consumers if he determines that homeowners were overcharged. Allstate is California's third largest home insurance provider with 900,000 homeowner policies. SOURCE Consumer Federation of California Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 22. New Poll Shows that Recession Would Not Impact Global Outsourcing Trend Smart Multimedia Gallery TROY, Mich.--(BUSINESS WIRE)--Syntel, Inc. (NASDAQ:SYNT), a global information technology services and Business Process Outsourcing (BPO) firm, surveyed 373 Fortune 1000 IT executives of global companies on their views of the global outsourcing industry. The TrendScan® survey by Syntel was conducted online between April 27, 2007 and May 15, 2007. SYNTEL’S VIEW Demand Would Remain Strong: 60% Historically, global sourcing has been a strong hedge in challenging economic periods, due to cost reduction benefits and improved efficiency. Its been said many companies have tried global sourcing for the cost benefits, and stayed with it due to the quality improvements. In fact, in a 2006 TrendScan poll, quality improvement was cited as the biggest benefit to global sourcing (scoring higher than cost reduction for the first time.) The global IT outsourcing segment is anticipated to grow between 27-30 percent, according to a NASSCOM/McKinsey study in March 2007. In the event of a recession, global sourcing demand could grow at an even faster rate, as corporations attempt to “do more with less” budget dollars. Demand Would Be Mildly Impacted: 25% It would take a serious downturn to affect demand for global outsourcing significantly, but it’s natural to assume there could be a minimal impact since all corporate departments, including IT, would likely see some belt-tightening during a recession. Certainly, no one can guarantee that a recession will not occur, but most experts, including former Federal Reserve chief Alan Greenspan, say there is a 66 percent chance that we will not see a recession in 2007. Demand Would Be Negatively Impacted: 15% This low-percentage response points to the difficulty of envisioning a recession scenario that would result in a major decline in demand for global delivery of IT solutions. “Today businesses understand that global sourcing provides a very strong management tool to manage through economic change,” said Bharat Desai, Syntel Chairman and Chief Executive Officer. “As I meet with CEO’s and CIO’s of major corporations, it is evident that global sourcing has become a key strategic tool for driving innovation and creating significant operational efficiency within their environments.” www.syntelinc.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 23. WSJ.com/Harris Interactive Survey: Sixty-Nine Percent of Employed U.S. Adults Receive Some Type of Retirement/Savings Benefit from Their Employer ROCHESTER, N.Y., May 23 /PRNewswire/ -- A new Wall Street Journal Online/Harris Interactive Personal Finance Poll found that sixty-nine percent of employed U.S. adults receive some type of retirement or other savings benefit from their employer and that just under half of employed adults (49%) can participate in a 401(k) plan. Thirty-six percent say their employer matches their 401(k) contributions and 29 percent have a pension plan. Thirteen percent have the opportunity to buy company stock and 9 percent can participate in their company's stock-option plan. These are just some of the results of an online survey of 2,373 U.S. adults conducted by Harris Interactive® between April 11 and 13, 2007 for The Wall Street Journal Online. Those with more education are in jobs that offer a greater variety of financial-planning and retirement-preparation opportunities and incentives. For example, 33 percent of employed respondents who are college graduates say their employer provides a generous company match toward 401(k) plan contributions, compared with 16 percent of those with high-school education or less. Further, one quarter of college grads say that their employer invites professionals to provide financial or retirement-planning workshops. Only eight percent of those with a high school education or less have this same opportunity. When asked what factors they consider important when evaluating a potential employer, more than half (53%) of U.S. adults say they consider a comprehensive retirement-plan package to be extremely or very important, followed by the amount of vacation time offered (50%) and the diversity of 401(k) options important (50%). Just under half (48%) indicate the availability of telecommuting or flexible scheduling as important while thirty-one percent consider their employer's advice about retirement options and financial planning to be an important consideration. About one in four (22%) indicate whether the company has stock options is important in their evaluation. Few U.S. adults say they base their retirement and financial planning decisions on advice from their employer. Forty-one percent of respondents say they make their investment and retirement planning decisions based on personal research or advice from family and friends, while 20 percent say they rely on financial advisers for guidance and only 3 percent rely on their employer. Further, nearly two-thirds (66%) say that their employers play a minor role or no role in their retirement preparations, compared with just 12 percent who say their employer plays a major role. As respondents earn more, they are more likely to say their employer played a major or important role in their retirement preparations, but even among respondents who earn more than $75K, 59 percent report that their employer played a minor/no role. Natalie Jobity, Vice President of Financial Services for Harris Interactive, provides insight on this issue. "For many employees, their 401(k) plan is often their only retirement savings vehicle and many are confused or overwhelmed by the choices available to them. There is clearly a need for advice and guidance, especially among the younger workforce. Companies can play more of a role in employee retirement and financial planning especially if they offer more educational opportunities to help employees plan and use this as a strategy to retain, and possibly attract, talent." To become a member of the Harris Poll Online and be invited to participate in online surveys, register at www.harrispollonline.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 24. MetLife Introduces Two New Dental Quality Resource Guides in ADA Approved Continuing Education Program NEW YORK--(BUSINESS WIRE)----MetLife today announced two new additions to its series of Web-based self study continuing education guides for the dental community, Medical Emergencies: Preparation and Management and Treatment Planning. MetLife is approved by the American Dental Association (ADA) as a recognized provider under its Continuing Education Recognition Program (CERP), and these new offerings may be used to fulfill licensing requirements where applicable. MetLife's educational offerings are also approved by the Academy of General Dentistry. Access to these and other Quality Resource Guides in MetLife's Dental Continuing Education Program are available at www.metdental.com. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 25. StanCorp Financial Group, Inc. Announces New Share Repurchase Program PORTLAND, Ore., May 23 /PRNewswire-FirstCall/ -- StanCorp Financial Group, Inc. ("StanCorp") (NYSE: SFG) announced today that its board of directors has authorized a repurchase program for up to 6 million shares of StanCorp common stock. www.stancorpfinancial.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 26. Greenlight Capital Re, Ltd. Prices Initial Public Offering GLRE Begins Trading on NASDAQ GRAND CAYMAN, Cayman Islands, May 24 /PRNewswire-FirstCall/ -- Greenlight Capital Re, Ltd. (Nasdaq: GLRE), a specialty property and casualty reinsurer based in the Cayman Islands, today announced that its initial public offering of 10,250,000 Class A Ordinary Shares priced at $19.00 per share. Substantially all of the net proceeds of the initial public offering will be used to increase the underwriting capacity of the company's reinsurance operations. Greenlight Re also granted the underwriters an option to purchase up to an additional 1,537,500 Class A Ordinary Shares at the initial public offering price to cover allotments, if any. The Company's Class A Ordinary Shares will begin trading today on the NASDAQ under the symbol GLRE. The offering is expected to close on or about May 30, 2007. http://www.greenlightre.ky is a specialty property and casualty reinsurance company based in the Cayman Islands. The Company provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces. Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 27. Priority Health Introduces New Product to Drive Healthier Choices and Lower Costs GRAND RAPIDS, Mich.--(BUSINESS WIRE)--Employers can now save up to 13 percent on health care premiums while improving the health of their employees with HealthbyChoice IncentivesSM, a new product introduced today by Priority Health, a Michigan-based health plan. The new product option provides an employer’s workforce with dual-level benefits: an enriched level of benefits for those who choose to follow certain health requirements and a standard plan for those who choose not to. “HealthbyChoice Incentives is part of Priority Health’s growing portfolio of consumer-engaged health plans, programs and services,” said Leon Lamoreaux, vice president of business development for Priority Health. “It combines a health plan and wellness program into one product that offers a strong incentive for employees to make healthier choices while also lowering costs significantly for employers.” www.priorityhealth.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 28. RedBrick Health: First Consumer-Owned Health Company MINNEAPOLIS--(BUSINESS WIRE)--Recognized health care leaders, and founders of Definity Health, oday announced the formation of RedBrick Health, a health services company created to lead the transition to Consumer-Owned Health, which will allow employers the ability to clearly define health benefit contributions and grant employees the opportunity to control personal health care costs. The founders of RedBrick Health include CEO Kyle Rolfing, chief strategist Abir Sen, and other key layers from the founding team at Definity Health, a UnitedHealth Group Company. RedBrick Health combines responsible financing, personal wellness plans and independent advocacy services creating a completely personalized and integrated health care solution. “Over 50% of health care costs are a result of individual behavior. It’s about time that we recognize this and take it head-on,” said Kyle Rolfing, CEO, RedBrick Health. “The RedBrick Health solution provides a responsible transition from employer sponsored health care to Consumer-Owned Health where all of the stakeholders win,” continued Rolfing. “Our desire to transform the health care system in this country pressed us to once again challenge the status quo. We have built something innovative and compelling for both employers and employees. Consumer-Owned Health will help alleviate cost concerns and create a culture where wellness is fostered and rewarded.” In October 2006 RedBrick Health secured $15 million in funding from Highland Capital Partners and Versant Ventures thereby creating a solid foundation to create consumer ownership in health care. www.redbrickhealth.com Return to Headlines - - Print Article / Read Entire Article / E-Mail Article 29. Ironshore Insurance Receives Surplus Lines Approval To Provide Property And Casualty Insurance For Florida Risks Hamilton, Bermuda, May 24, 2007 - Ironshore Insurance Ltd. was approved to write property, property catastrophe and casualty insurance on an excess and surplus basis for risks located in the State of Florida. Ironshore, formed in late 2006, is a Bermuda-based specialty insurance company with over $1 billion of capital. "We are excited about being available to the Florida marketplace as a surplus lines insurer. There is a great need for the specialty lines coverages we provide in the state, and we're pleased to be accepted as a market solution for the citizens of Florida," said Robert V. Deutsch, Chief Executive Officer of Ironshore. Les Rock, Ironshore's Chief Underwriting Officer, commented, "This is a 'win-win' for both Ironshore and Florida business owners. We intend to play an active role in helping to alleviate the ongoing capacity shortage." 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