Best's Review articles from January 2005

Best's Review archives from January 2005

Out with the new.(Editor's Prologue)(Editorial)
January 1, 2005... Trying something for the first time can be scary, and insurers are known for their caution. Yet, sometimes a bold soul steps forward and introduces a concept or a product or a process that is so good that other insurers adapt it, or at least...

In the spotlight *.(Comment)
January 1, 2005... "Agents, producers of all types, have got to decide, who's your master? The good book says you can't have two masters, and by God, if you're going to try to have two masters, you've got to get permission, and you've got to disclose it. And...

Former Mich. insurance commissioner dies at 49.(People in Insurance)(Brief Article)(Biography)
January 1, 2005... Few were left in the dark when it came to knowing where Michigan's former state Rep. Frank M. Fitzgerald stood on an issue he believed in. Not content with the status quo, or shy about expressing his opinion during his years in public...

NAIC seeks targeted response to compensation controversy.(National Association of Insurance Commissioners)
January 1, 2005... State insurance regulators are struggling to find the right target as they take aim at broker-compensation practices that have become controversial in the wake of investigations and lawsuits by New York state Attorney General Eliot Spitzer and...

Ace European Group.(People in Insurance)(Brief Article)
January 1, 2005... Andrew Kendrick has been named chairman and chief executive officer of Ace European Group; Keith White has been appointed executive officer of Bermuda companies; Rees Fletcher is the new president and CEO of Ace Bermuda; and Judith Gonsalves...

Jackson National Life Insurance Co.(People in Insurance)(Brief Article)
January 1, 2005... Jackson National Life Insurance Co. has named Bruce Wing senior vice president and national sales director for life insurance products. Wing will be responsible for the distribution of Jackson's life insurance product portfolio.

Scottish Re Group Ltd.(People in Insurance)(Brief Article)
January 1, 2005... Bermuda-based life reinsurer Scottish Re Group Ltd. announced President Scott Willkomm will replace Michael C. French as chief executive officer as of Jan. 1,2005. French, 61, a director and CEO at Scottish Re since 1998, will remain chairman,...

Study: cost of workplace injuries continues to climb.(By the Numbers)(Brief Article)
January 1, 2005... Even after adjusting for medical and wage inflation, the cost of workplace injuries keeps growing, according to the 2004 Liberty Mutual Workplace Safety Index. The cost of these injuires grew 6.5% between 2001 and 2002. $1 billion a...

The 10 leading causes of workplace injuries in 2002.(By the Numbers)(Brief Article)(Illustration)
January 1, 2005... The 10 Leading Causes Of Workplace Injuries in 2002 Overexertion (1) 26.6% Falls on Same Level 12.5% Bodily Reaction (2) 10.8% Falls to Lower Level 9.2%...

Half of the total cost of serious workplace injuries stem from three causes.(By the Numbers)
January 1, 2005... Increases in Costs Between 2001 and 2002 3.8% Overexertion 5.9% Falls on the same level 11.8% Bodily reaction Half of the Total Cost of Serious Workplace Injuries Stem from Three Causes Overexertion 26.6%...

Meetings.(Calendar)
January 1, 2005... Jan. 31-Feb. 3 Global Association of Risk Professionals, GARP 2005, 6th Annual Risk Management Convention, Marriott Marquis Hotel, New York. Phone: (44)-20-7626-9301. Fax: (44)-20-7626-9900. Web site: www.garp.com. Feb....

Medicare overpayments exceed $20 billion.(Brief Article)
January 1, 2005... Doctors and other health-care providers participating in Medicare's fee-for-service program were paid $900 million less than they should have received in 2003 because of errors made by insurers, according to a new government report aimed at...

Soft D&O market isn't expected to last.(directors and officers)(Brief Article)
January 1, 2005... Average premiums for U.S. directors and officers liability coverage dropped in 2004 for the first time since 1999, but observers predicted that continued upward pressure in both frequency and severity of losses would spur an end to the current...

Bill frees catastrophe fund to reimburse Fla. deductibles.(Florida)
January 1, 2005... The Florida Legislature on Dec. 16 passed and sent to Gov. Jeb Bush a final package on multiple hurricane deductibles, which includes a $150 million loan from the Florida Hurricane Catastrophe Fund. The loan would provide financial...

Best's rating changes.(Ratings)(Illustration)
January 1, 2005... This edition of Best's Rating Changes reflects all rating changes--assignments, changes or placed under review--that occurred for life, health and property/casualty insurers domiciled in North America, as well as international insurance...

Guide to best's financial strength ratings.(Ratings)(Illustration)
January 1, 2005... A Best's Rating is an independent opinion, based on a comprehensive quantitative and qualitative evaluation, of a company's balance sheet strength, operating performance and business profile. Best's Ratings are not a warranty of a company's...

Something new under the sun.(insurers)(Brief Article)(Cover Story)
January 1, 2005... IN AN INDUSTRY not always noted for being adventurous or, ironically, willing to take big risks, the seven insurers described on the following pages stand out as creative thinkers that have advanced new business processes and new products....

Earning its name: Progressive claims a number of 'firsts,' but it's best known today for pricing through risk segmentation.(Underwriting: property/casualty)
January 1, 2005... A company named Progressive might be expected to be an innovator. "Progressive definitely has a culture that encourages innovation," Mary Beth McDade, a company spokeswoman, said in a statement. "That culture is not new to the company, and,...

House of 1,000 specialties: Swiss Re is a leader in identifying future risks and future opportunities.(Reinsurance/Capital Markets)
January 1, 2005... From studying the possible effects of global warming to examining how coming into contact with particles measuring one billionth of a meter might impact people's health, Swiss Re has been an industry leader in identifying new risks and new...

A new packaged deal: Kaiser Permanente first applied the HMO concept on a wide-scale basis.(Health/Employee Benefits)(health maintenance organizations)
January 1, 2005... While some historians believe HMO-style plans date hack to ancient China, the modernization of the prepaid health plan occurred nearly 60 years ago. Kaiser Permanente is credited as being an innovator in the modern health maintenance...

Brainstorming for business: AIG's search for new risks worldwide often makes it the first to market a new insurance product.(New products: property/casualty)(American International Group Inc.)
January 1, 2005... The SAFETY Act, a provision in the Homeland Security Act of 2002, encourages companies to create new anti-terrorism technologies such as bomb sniffers for airports. The regulations for that Act, issued in October 2003, require the purchase of...

The hallmark of technology: RenaissanceRe stands out among reinsurers for its innovative use of technology in underwriting, particularly when it involves catastrophe modeling.(Reinsurance)(RenaissanceRe Holdings Ltd.)
January 1, 2005... The foundation for RenaissanceRe Holdings' prowess in underwriting property catastrophe reinsurance relies on well-designed technology together with a culture that understands the strengths and weaknesses of that tool in making decisions, said...

Racing inflation: TIAA-CREF developed the variable annuity to help its pensioners when high inflation and low interest rates followed World War II.(Variable annuities: life)(Teachers Insurance and Annuity Association)(College Retirement Equities Fund)
January 1, 2005... In the Roaring '20s, stocks and the economy were hot in the United States. So was inflation, which eroded the value of fixed pensions. Teachers Insurance and Annuity Association (TIAA), formed in 1918, was in its early years, but leaders of the...

A caring proposition: CNA developed long-term-care insurance on the heels of the fledgling Medicare law.(Long-term care: life)(CNA Financial Corp.)
January 1, 2005... The first long-term-care insurance product came on the scene in 1965, when the cultural and economic conditions in the United States were remarkably different from today. The result has been that today's LTC product bears little resemblance to...

Business as never before: court decisions in 2004 are changing the way insurers work.(Regulatory/Law)(Brief Article)
January 1, 2005... Although legislators and regulators closely govern the business of insurance, actions with the greatest impact on the industry are often delivered by the courts. In 2004, plaintiffs sought rulings on matters ranging from coverage disputes to...

Federal trumps state law in HMO disputes.(Regulatory/Law)(Health maintenance organizations )(Brief Article)
January 1, 2005... Health maintenance organizations breathed a sigh of relief on June 21, 2004, when the U.S. Supreme Court unanimously issued a decision in the consolidated cases of Aetna Health Inc. vs. Juan Davila and Cigna Healthcare of Texas Inc. and Cigna...

Court opinions differ on diminished value.(Regulatory/Law)(cases )
January 1, 2005... When an insured vehicle is damaged and repaired, its market value may not return to the pre-damage level. Insurers are responsible for reimbursing the owner for the difference in Georgia, but not in the vast majority of states. In some states,...

WTC: one loss for some, two for others.(Regulatory/Law)(World Trade Cener)(cases)
January 1, 2005... While the legal battle for how much insurers must pay to rebuild the World Trade Center rages on, the lawsuits have already affected how the insurance industry does business. A complicated legal battle between 22 insurers and Larry...

Insurers gain some limits in asbestos claims.(Regulatory/Law)(cases)
January 1, 2005... Insurers came away with a victory late last year in an asbestos-exposure case that has been before courts for about a decade. The case in question, In Re: The Wallace & Gale Co., involved an installer of asbestos material and its insurers....

Modal premium litigation: adding it up.(Regulatory/Law)
January 1, 2005... The controversy surrounding modal premium litigation that began five years ago continued in 2004 with two more court cases pending in New Mexico. While some industry experts were unsure at press time whether verdicts would be reached by year...

Punitive-damages award remains $9 million.(Regulatory/Law)(cases)
January 1, 2005... In nearly October the 2004, the U.S. Supreme Court put an end to two decades of litigation by declining to review its decision in the case of State Farm Mutual Automobile Insurance Co. vs. Campbell. The marathon case began when the late...

Spitzer probes insurer/broker relationship.(Regulatory/Law)
January 1, 2005... New York Attorney General Eliot Spitzer's fraud and antitrust charges against Marsh & McClennan Cos. have spawned a myriad of similar investigations in various states, not to mention Congressional and regulatory hearings. While subpoenas...

Take a bearing: in 2005, insurers will allocate IT spending to projects that support development and growth to meet one of six business objectives.(Technology)
January 1, 2005... Key Points * Information technology spending in the U.S. insurance industry is projected to remain relatively flat from 2004 to 2005. * TowerGroup estimates that insurers will allocate less than 10% of the total operating budget to IT...

Strengthening IT talent: recruitment outsourcing increasingly is being used to obtain top quality IT candidates.(Technology)
January 1, 2005... Strengthening talent levels was identified as the most important recruitment issue for 2005 by almost 70% of organizations based upon a recent InSearch Worldwide survey of more than 300 human resource executives. This is a significant change...

Fraud among friends: some unscrupulous insurance agents break the bonds of trust and steal from policyholders and carriers.(Agent/Broker)
January 1, 2005... Key Points * Based on industry, occupational fraud in the insurance business ranks sixth in the United States, according to the Association of Certified Fraud Examiners. * The insurance industry figured in 46, or 9.1% of the cases...

The top 10 scams.(frauds)
January 1, 2005... Investors lose billions of dollars each year to investment fraud, said Ralph Lambiase, president of the North American Securities Administration Association. In its annual survey of state securities regulators, NASAA asked them to identify the...

The many faces of fraud.(Agent/Broker)
January 1, 2005... Insurance agent or broker fraud can take many forms. Here are some recent examples: * A Burtonsville, Md., insurance agent and a Takoma Park, Md., woman were among 31 people indicted in June 2004 by federal authorities in Maryland in...

Capturing control: since regulators made it easier for companies to use captives for employee benefits, U.S. businesses are hoping that life/health business, like property/casualty, can be better controlled in a captive.(Health/Employee Benefits)
January 1, 2005... Key Points * The federal government has eased restrictions on companies using captives to fund employee benefits, allowing them to qualify for "fast-track" approval in 75 days. * With spending on employee benefits up 24% in four years,...

Employee-benefits captives by the numbers.(Health/Employee Benefits)
January 1, 2005... In a survey of 60 companies in North America and Europe, global consulting group Towers Perrin discovered companies that are not multinational conglomerates are exploring captives for employee benefits. About 13% of the companies surveyed said...

Team Primerica: Primerica Life Insurance Co.'s vibrant business with middle-income Americans defies the norm in today's life industry. An extra surprise is that co-CEOs head up its management.(Management)
January 1, 2005... Key Points * Primerica's co-CEOs worked together for more than 15 years before assuming top leadership. * The company's system that reaches middle-income families is hard to duplicate. * Most agents work part time. * Agents...

Advertisement.(Illustration)(Advertisement)
January 1, 2005... AXA Equitable Life Insurance Company (1) AXA Life and Annuity Company (2) One Year Term Insurance Policy * Non-Renewable, Non-Convertible Initial Premium Male/Female/Unisex Rates Per $1,000 of Face Amount $50,000 Minimum Face Amount -...

Could it happen here? The regulators' response to scandals in the mutual fund and insurance brokerage industries may hold some harsh lessons for life insurers.(Underwriting insight: life)
January 1, 2005... As the scandals that rocked the mutual fund industry came to light over the past year and a half, life insurance companies largely managed to stay above the fray. They watched from the sidelines as revelations of trading abuses by highly...

Weathering the results: months after suffering through a record four hurricanes, the Sunshine State's insurance industry continues to pick up the pieces.(Catastrophe coverage: property/casualty)
January 1, 2005... Key Points * Florida's unusual hurricane season has spiked interest among some insurance clients for more coverage. * Through November 2004, the Florida Department of Financial Services had received roughly 1,000 requests from...

After the storms: homeowners deductibles and reinsurance raise questions in Florida.(reinsurance/capital markets)
January 1, 2005... Key Points * Insurers have attempted to determine what damage was caused by each hurricane and how to apply deductibles. * For some reinsurers, having a large amount of claims assigned to one hurricane could work out well. * The...

Pricing it right: understanding the pricing of excess reinsurance can help underwriters place layered deals.(reinsurance/capital markets)
January 1, 2005... When I started working for a reinsurance company five years ago, I thought my biggest challenge would be mastering pricing techniques used in the reinsurance world. Even as an experienced primary underwriter, I was often mystified at the...

Frequency matters: measures taken after Hurricane Andrew helped as Florida endured four major hurricanes in 2004. But, it is still difficult to prepare for a season that catastrophic.(Catastrophe coverage: property/casualty)
January 1, 2005... Key Points * Post-Hurricane Andrew reforms improved the Florida insurance system's response to the storms of 2004. * Insurance pricing must be transparent enough to withstand regulatory and public review. * The 2004 season taught...

Measuring up: baseball statistics are far superior to those commonly used to manage or evaluate corporations.(Loss/risk management insight: property/casualty)
January 1, 2005... In both baseball and business, we are inundated by statistics. Baseball aficionados can routinely rank players by their batting average, on-base percentage and slugging percentage, to mention only a few. Investors can rank corporations by their...

Dangerous renting: lack of training poses risks.(Loss/risk management notes: property/casualty)(Brief Article)
January 1, 2005... Accidents involving rented items such as lifts, fork-lifts, trailers, tents and chairs posed the greatest risks for consumers and were associated with the highest numbers of fatalities, injuries and damages in the equipment rental industry,...

New test for Loss Controllers.(Loss/risk management notes: property/casualty)(Brief Article)
January 1, 2005... To help assure the continued professionalism and competency of insurance loss control staff, the Property Casualty Insurers Association of America and the American Insurance Association have worked with a respected safety organization to define...

High-end medical equipment covered by new policy.(Loss/risk management notes: property/casualty)(Brief Article)
January 1, 2005... Hartford Financial Services Group Inc. has launched a tailored insurance package to address the specific coverage needs of owners of high-end medical diagnostic equipment such as CAT scans and magnetic resonance imagers, or MRIs. The...

XL adds fiduciary liability.(Loss/risk management notes: property/casualty)(XL Insurance (Bermuda) Ltd.)(Brief Article)
January 1, 2005... XL Insurance (Bermuda) Ltd, a subsidiary of XL Capital Ltd., said its Bermuda-based professional lines insurance operation has added fiduciary liability coverage to its directors and officers insurance policy. The expanded policy, known as...

AIG offers biochemical attack insurance.(Loss/risk management notes: property/casualty)(American International Group)(Brief Article)
January 1, 2005... American International Group launched LexHomeland Protector, a terrorism insurance portfolio to protect businesses against terrorism risks, including losses from biological and chemical attacks. The portfolio includes a new biochemical...

Working up a suit: as more people sue the company they work for, employment practices liability insurance is becoming standard coverage.(Employment: regulatory/law)
January 1, 2005... Key Points * From 1999 through 2003, more than 403,000 charges were filed by employees under all statutes with the Equal Employment Opportunity Commission. * The median compensatory jury award for employment practices liability cases...

Hartford Steam Boiler created small-business approach.(Employment practices liability: regulatory/law)(Hartford Steam Boiler Inspection and Insurance Co.)
January 1, 2005... Hartford Steam Boiler Inspection and Insurance Co. recently introduced its Portfolio EPL coverage, an employment practices liability program aimed at small and medium-size businesses. The specialty reinsurer's program provides broad EPL...

At St. Paul, EPL is a core coverage.(Employment practices liability: regulatory/law)(St. Paul Travelers)(Brief Article)
January 1, 2005... Employment practices liability insurance forms a "sizable" portion of St. Paul Travelers business. "It's something that we have been offering for quite some time--it's a core coverage," said Carrie Brodzinski, vice president, executive...

Continuing the battle: quantity of claims, not underlying merit, has become a driving force in asbestos bankruptcies.(Legal insight: regulatory/law)
January 1, 2005... Bankruptcy is intended to prevent a feeding frenzy by creditors, maximize value of bankrupt debtors' limited assets and ensure that creditors' claims are paid in an orderly and fair manner. But recent asbestos bankruptcies reveal different...

The power of parallel: companies can achieve remarkable levels of growth by seeking to bring in line the interests of the customers with the interests of the company.(Selling insight: life)
January 1, 2005... In nature, there's an elementary law called the "power of parallel." This law dictates that when efforts and activities are aligned in parallel, they are more powerful and effective than those that are divergent or conflicting. Horses to a...

The Lincoln National Life Insurance Co.(Variable Annuity Writers Add to Their Guarantees)(Lincoln SmartSecurity Advantage introduced)(Brief Article)
January 1, 2005... The Lincoln National Life Insurance Co. has introduced Lincoln SmartSecurity Advantage, a guaranteed minimum withdrawal benefit that offers both downside protection and the ability to lock in market gains automatically on an annual basis....

Genworth Financial.(Variable Annuity Writers Add to Their Guarantees)(Brief Article)
January 1, 2005... Genworth Financial has added a fourth product to its retirement income series: GE Principal Protection Advantage, a rider available on select variable annuities. The rider guarantees income payments totaling no less than the original investment...

Jackson National Life Insurance Co.(Variable Annuity Writers Add to Their Guarantees)(Brief Article)
January 1, 2005... Jackson National Life Insurance Co. has introduced two guaranteed minimum withdrawal benefits, LifeGuard 4 and LifeGuard 5, with its variable annuities. At an additional cost, the benefits guarantee contract holders they will recover their...

Study: boomers 'paralyzed' over retirement savings.(Marketplace: life)(surveys)(Brief Article)
January 1, 2005... A recent study by the Affluent Market Research Program of research company TNS reported there are 8.2 million households in the United States with a net worth of $1 million or more, excluding primary residences, up from 6.2 million in 2003. But...

MetLife raises life insurance maximum amount for individuals.(Marketplace: life)(underwriting guideliness released)(Brief Article)
January 1, 2005... MetLife Inc. has established new financial underwriting guidelines that raise the maximum amount of life insurance it will issue to individuals across all age categories. The company said it is the first major life insurer to offer...

Making strategy operational: to bring about effective change, insurers have to identify and control the true drivers of the business. A Balanced Scorecard approach can help.(Business strategy: strategy)
January 1, 2005... Key Points * Balanced Scorecard methodology allows companies, including insurers, to transform their strategy into quantifiable measures. * For every critical success factor, one or more key performance indicators are created to...

eMoney Advisor.(Web News You Can Use)(Web Services )(Brief Article)
January 1, 2005... * eMoney Advisor, a provider of holistic wealth planning and client management solutions, said it has successfully integrated with Albridge Solution's Web Services platform. The platform provides a seamless and secure way to pass consolidated...

Entrust Inc.(Web News You Can Use)(Entrust Entelligence Compliance Server introduced)(Brief Article)
January 1, 2005... * Entrust Inc. announced the commercial availability of the Entrust Entelligence Compliance Server, a Linux-based appliance that helps enterprise and government customers enable real-time e-mail compliance. The content scanner automatically...

Netli.(Web News You Can Use)(Netli reaches an agreement with RI3k Ltd.)(Brief Article)
January 1, 2005... * Netli, which provides application delivery network services, announced that ri3k, the global reinsurance infrastructure provider, has selected it to provide LAN-like response times and improve Web application availability for users of its...

Perot Systems Corp.(Web News You Can Use)(product introduction)(Brief Article)
January 1, 2005... * Perot Systems Corp. launched Payer PERADIGM, a new core administrative system for health plan administration. Its new Services Oriented Architecture framework is J2EE compliant and intefaces with new Web services.

More insurers embracing Web services in past year.(Technology notes: technology)
January 1, 2005... Web services are a growing part of many insurers' operations, due in part to their ability, to improve customer service and reduce operating costs, according to a recent survey of more than 130 insurance industry executives and information...

Setting the pace: the costs of some key components in property/casualty claims are making slower strides in the race against inflation.(Claim costs: property/casualty)
January 1, 2005... Hospital services continued to outpace the general rate of inflation through 2003. However, auto-body repair and legal costs grew at a slower pace than the general rate of inflation, while physician services outpaced general inflation slightly...

Gearing for success: direct-response marketing has great opportunity to grow but must meet the challenge of managing change.(Selling insight: property/casualty)
January 1, 2005... The insurance industry is facing barriers to growth including marketing clutter, a saturated target market, escalating costs and increased regulatory restrictions. We also are facing key consumer trends such as the changing family structure and...

Allstate consolidates independent agency brands.(Marketplace: property/casualty)(Allstate Insurance Co.)(Brief Article)
January 1, 2005... Allstate's three independent agency brands will operate under the Encompass umbrella starting January 1. The company's goals are streamlining for agents and to expand product availability for consumers. Encompass will manage marketing...

Progressive debuts drive insurance ad campaign.(Marketplace: property/casualty)(Brief Article)
January 1, 2005... Progressive is branding its $10 billion agency business and launching a multimillion dollar marketing campaign to educate consumers about the advantages independent agents have over captive agents. The campaign for the new brand, Drive...

Genworth appears on 'The Apprentice'.(Marketplace: property/casualty)(Genworth Financial Services)(Brief Article)
January 1, 2005... Looking to establish a brand identity independent of its more famous former corporate parent, life and mortgage insurer Genworth Financial Services stepped into a rather large spotlight as the General Electric Co. spin-off was featured on the...

Farmers agrees to reduce homeowners rates in Texas.(Companies)(Farmers Insurance Exchange)(Brief Article)
January 1, 2005... The Texas unit of Farmers Insurance Exchange has settled its dispute with state Insurance Commissioner Jose Montemayor over ordered homeowners rate reductions, with the insurer agreeing to file a 5% across-the-board rate reduction and an...

IBM makes major move into life, annuity administration.(Companies)(Liberty Insurance Services Corp. acquired)(Brief Article)
January 1, 2005... IBM has taken a major step into the global life insurance administration market with the purchase of Liberty Insurance Services Corp., the U.S. subsidiary of Toronto's RBC Insurance Group. Liberty Insurance Services, which is headquartered...

Willis headquarters building on the horizon in London.(Companies)(Willis Group Holdings)(Brief Article)
January 1, 2005... International insurance broker Willis Group Holdings has agreed to terms on the lease of a planned 23-story building that will serve as its British headquarters. The Willis Building, as the structure is to be known, will add a major...

Aetna to enter behavioral health business in 2006.(Companies)(Brief Article)
January 1, 2005... Hartford, Conn.-based Aetna Inc. will offer its own behavioral-health business effective Jan. 1, 2006, following the leading health insurer's $50 million-plus purchase of assets from Magellan Health Services Inc. of Farmington, Conn. "We...

A different climate: changes in regulation, health-care costs, market appeal and the weather drove the top insurance news stories of 2004.(The last word: top 10 insurance news stories 2004)
January 1, 2005... FLORIDA INSURERS SURVIVE SEVERE HURRICANE SEASON. Despite the four major hurricanes--Charley, Frances, Ivan and Jeanne--that devastated Florida and the southeastern United States, the property/casualty industry overall remained strong, thanks...