Best's Review articles from March 2005

Best's Review archives from March 2005

Dreams and power sources.(Editorial)
March 1, 2005... Taking a trip into space may become commonplace sooner than you think, but not without help from outside the space industry. "We have a great saying" said George Whitesides, executive director of the National Space Society. "Amateurs talk about...

Quote/unquote *.(Comment)
March 1, 2005... "If you look back 25 years ago, the No. 1 motivation for buying the coverage [environmental liability insurance] was regulatory driven. Fast forward to today, and financial institutions require it. Boards of directors require it. In (mergers...

Correction.(Correction Notice)
March 1, 2005... An article about information technology in January's Best's Review had an incorrect percentage. TowerGroup estimates that insurers will allocate less than 25% of the total operating budget to IT spending in 2005.

Marsh Inc.(appointment of Bruce Carnegie-Brown )(Brief Article)
March 1, 2005... Insurance broker and consultant Marsh Inc. has named Bruce Carnegie-Brown president and chief executive officer for Europe and the Middle East. Carnegie-Brown, who is Marsh's chief executive officer in the United Kingdom and Ireland, will...

UniCare.(appoitment of David W. Fields, UniCARE Insurance Co.)(Brief Article)
March 1, 2005... UniCare, a U.S. subsidiary of WellPoint Inc., has named David W. Fields president and chief executive officer. Most recently, Fields was general manager of the consumer services division for Blue Cross and Blue Shield of Georgia Inc.

William O. Bailey, the former president, chief operating officer and vice chairman of health insurer Aetna Inc. and the former chief executive officer and chairman of MBIA Inc., who helped pioneer the financial guarantee industry, has died of pneumonia.(Brief Article)(Obituary)
March 1, 2005... William O. Bailey, the former president, chief operating officer and vice chairman of health insurer Aetna Inc. and the former chief executive officer and chairman of MBIA Inc., who helped pioneer the financial guarantee industry, has died of...

Marsh fund to pay $850m in settlement with Spitzer.(Marsh Inc., Eliot Spitzer)
March 1, 2005... Parting the most ominous storm cloud that had been looming over the insurance industry in recent months, Marsh & McLennan Cos. is to establish an $850 million restitution fund to settle civil fraud and antitrust charges brought against the...

Willis Re, the reinsurance unit of broker Willis Group Holdings Ltd., has named Peter C. Hearn.(Brief Article)
March 1, 2005... Willis Re, the reinsurance unit of broker Willis Group Holdings Ltd., has named Peter C. Hearn chief executive officer of Willis Re U.S. George Reeth, previously in this position, has been named president of Willis North America. Hearn has...

St. Paul Travelers Cos.(appointments)(Brief Article)
March 1, 2005... St. Paul Travelers Cos. has named T. Michael Miller and Brian MacLean to the newly created positions of chief operating officers of the company. Miller is responsible for the specialty business and the company's regional executive organization,...

Independence Blue Cross.(appointments)(Brief Article)
March 1, 2005... Independence Blue Cross has named Joseph A. Frick president and chief executive officer and Christopher D. Butler executive vice president and chief operating officer. Frick and Butler have been handling daily operations since Jan. 4, when...

A.M Best special report: life/health rating upgrades outnumbered downgrades in 2004.(By the Numbers)(Brief Article)
March 1, 2005... In 2004, the life/health insurance industry experienced improved operating earnings and balance sheet strength, with A.M. Best Co.'s rating upgrades outnumbering downgrades by a slight margin. A.M. Best's year-end ratings outlook for the...

Meetings.(Briefing)(Calendar)
March 1, 2005... March 13-16 GAMA International: LAMP 2005, Atlanta Marriott Marquis, Atlanta. Phone: (703) 770-8174. Web site: www.gamaweb.com. March 21-22 The Geneva Association: 5th CEO Insurance Summit in Asia, Taipei, Taiwan. Phone: +41-22-707 66 00....

Duperreault honored as Leader of the Year.(Briefing)(Brian Duperreault)(Brief Article)
March 1, 2005... In line with Bermuda's growing importance as a global insurance market, the insurance industry honored a native son of the island as the 10th recipient of the Insurance Leader of the Year award, sponsored by St. John's University's School of...

Court strikes down $117.5m settlement.(Briefing)(Brief Article)
March 1, 2005... A Texas appeals court has struck down a $117.5 million settlement the state's attorney general and Department of Insurance reached with Farmers Insurance Group in late 2002, finding the agreement failed to meet statutory standards to be...

Consumer study snipes at personal lines agents.(Briefing)
March 1, 2005... A new study suggesting contingent commissions drive up the cost of personal insurance and provide perverse incentives to independent agents who work with consumers is drawing the ire of industry groups, one of which characterized the report as...

CareFirst wants court to end rift.(Briefing)(Brief Article)
March 1, 2005... Arguing that it now is caught between conflicting orders issued by the former Delaware insurance commissioner and the Maryland insurance commissioner, CareFirst Inc., the Maryland-based health insurance holding company, wants a federal court to...

Businesses face increased complexity of risks.(Briefing)
March 1, 2005... Multinational corporations are becoming more aware of the many political and trade credit risks to their operations, as the global economy increasingly becomes linked while at the same time new threats to businesses continue to emerge. ...

Best's rating changes.(Ratings)(Brief Article)(Illustration)
March 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...

Reach for the stars: insurers are playing a critical role in transforming the dream of affordable space tourism from a science fiction fantasy into a reachable reality.(Property/Casualty)(Cover Story)
March 1, 2005... Key Points * The Commercial Space Launch Amendments Act limits the liability for companies involved with commercial space travel. * Some coverage for commercial space flight will be similar to airplane insurance, while other aspects...

Standing appointments: the path of reinsurance renewals still leads through Monte Carlo and Baden-Baden, but consolidation and technology are changing the scenery.(Reinsurance/Capital Markets)
March 1, 2005... Key Points * The 2005 reinsurance renewal season found rates flatter than might have been expected, given the high level of catastrophes and other losses seen during 2004. * Reinsurance buyers are making increasing use of technology to...

Down, but not out: brokers say property reinsurance pricing continues to soften.(Reinsurance/Capital Markets)
March 1, 2005... Key Points * Reinsurers are seeing a shift in focus in property coverage from pricing to negotiations over terms and conditions. * U.S. market competition will continue to feed primary insurers' demands for security guarantees from...

Reserving clash: the life industry is divided over reserve requirements for certain UL policies with secondary guarantees.(Life)(universal life )
March 1, 2005... Key Points * A UL policy with a secondary guarantee is a UL policy with a "no-lapse" guarantee. * The debate over reserving for these policies stems from various interpretations of the NAIC's Actuarial Guideline 38. * Some...

Flu pandemic: a real threat: deaths and claims paid by life insurers would dwarf those generated by other natural disasters and terrorism.(Life)
March 1, 2005... History has shown that influenza pandemics happen with frightening regularity and will happen again. There have been 31 pandemics in the past 500 years and three in the past century, including the 1918-1919 "Spanish flu" that killed 20 million...

No small matter: nanotechnology holds out substantial growth opportunities--and possibly big risks--for the insurance industry.(Technology)
March 1, 2005... Key Points * Nanotechnology may deliver substantial growth opportunities to insurers, but it also may bring a new dimension in personal injury, property damage and pure financial losses, as well as third-party liability risks. *...

Spanning the business: financial performance management provides a glimpse at probable outcomes and trends in performance.(Technology)
March 1, 2005... Changing regulation, increased competitive pressure, globalization and Wall Street demand for more detailed and accurate information have pushed financial reporting to become top-of-mind in business management. While businesses are totted to...

To tell the truth: when it comes to disclosure, insurance is the last sector to feel Spitzer's influence.(Agent/Broker)
March 1, 2005... Key Points * Real estate brokers may work for both a buyer and a seller at the same time, on the same piece of property, if they get the written consent of both parties and provide each client with a written notice explaining the...

10 facts and myths about Gramm-Leach-Bliley: the GLB financial-services modernization law hasn't lived up to initial expectations, but it has brought changes, some for the better.(Regulatory/Law)
March 1, 2005... Key points * GLB has not been a total bust. It has ended court battles among financial services companies. * The insurance industry was losing those court battles. GLB has helped protect its turf. * The United States has not been...

Making healthy choices: consumer-driven health plans allow insureds to be more involved in decisions concerning health care.(Health/Employee Benefits)
March 1, 2005... Key Points * Consumer-driven health plans are predicted to collect almost $88 billion in premiums in 2007. * Health savings accounts are growing in popularity, particularly among smaller employers. * Some people believe...

Being in charge: health savings accounts are making consumers responsible for what they spend on medical care.(Health/Employee Benefits)
March 1, 2005... Key Points * Congress created health savings accounts to shift accountability for health-care costs back to households. * The average household spends more than $9,000 on health-care premiums, yet 50% of Americans use $1,000 of health...

Upscale move: Citigroup's premium distribution channels attracted MetLife.(Life)
March 1, 2005... MetLife Inc.'s $11.5 billion acquisition of Travelers Life & Annuity from Citigroup Inc. and nearly all of Citigroup's international life business was scale-driven, say industry consultants. Key to that scale will be MetLife's access to...

Covering it all: transurance offers an innovative approach to insuring traditionally uninsurable losses.(Property/Casualty)
March 1, 2005... Key Points * The indirect or collateral costs associated with typical commercial losses are generally not covered by insurance. * Transurance permits insureds to select a functional relationship between insurable losses and losses that...

A risk worth taking: entrepreneurship for carriers and brokers is not for the faint-hearted.(Property/Casualty)
March 1, 2005... Few of us like to think a lot about the future. It was Dan Quisenberry, a pitcher for the Kansas City Royals, who spoke those immortal and yet philosophical words describing the future as "just like the present, only longer." One does not have...

Insurance industry leaders expect more investigations.(Property/Casualty)(Brief Article)
March 1, 2005... Leaders of the property/casualty insurance industry expect state attorneys general and insurance departments will expand their investigations into certain industry practices, according to a survey by the Insurance Information Institute at its...

Buyers expect overall drop in commercial premiums.(Property/Casualty)(Brief Article)
March 1, 2005... Risk managers expect continued softening of prices to produce a drop in overall commercial premiums for the first time in four years, accompanied by less restrictive policy terms, according to Prudential Equity Group's January 2005 commercial...

New nonprofit group source for companies in runoff.(Property/Casualty)(Brief Article)
March 1, 2005... The Association of Insurance and Reinsurance Runoff Companies, a New York-based nonprofit corporation, has formed to represent the business interests of industry companies in runoff. Runoff refers to companies that are accepting no new...

Philadelphia Insurance covers EPLI, animal shelters.(Property/Casualty)(employment practices liability insurance)(Brief Article)
March 1, 2005... Philadelphia Insurance Cos. said it's launched two new products: a monoline employment practices liability insurance coverage and the addition of animal shelters to the company's nonprofit product offering. Eligible insureds for the EPLI...

Hartford offers new excess policy to fill coverage gaps.(Property/Casualty)(Hartford Financial Services Group Inc)(Brief Article)
March 1, 2005... Hartford Financial Services Group Inc. has introduced a new excess insurance policy that fits over directors & officers liability, fiduciary liability, employment practice liability, miscellaneous professional liability and tech errors &...

The bloom fades: new capacity is putting pressure on the primary U.S. casualty market, and reinsurers are shying away from some lines they think might be underpriced.(Reinsurance/Capital Markets)
March 1, 2005... Key Points * The primary casualty market is apparently softening more than the reinsurance market. * Primary directors and officers premium rates fell 10% in 2004 in spite of increasing severity and claims costs. * Security class...

The comeback corporation: Prudential Financial has emerged from a 10-year transformation as a leaner, more competitive and better positioned company.(Life)
March 1, 2005... Key Points * Prudential refashioned itself this past decade through divestitures, mergers and acquisitions. * The process of demutualization enabled management to create a more urgent, customer-focused culture. * The company is...

A time to reap rewards.(Life)(Prudential Securities)
March 1, 2005... Prudential's 10-year turnaround came in three phases: damage control stemming from life agent sales misconduct, divestiture of businesses from its 1980s' financial supermarket strategy, and what happened during and after demutualization. That...

An anchor to a struggling city.(Life)(Prudential)
March 1, 2005... Prudential has called Newark home for all of its 130 years. Today, its 24-story headquarters building with a white marble veneer stands out brightly among the older, darker buildings of the city's downtown. Completed in 1960. the building...

It's all about trust: as consumers continue to clamor for transparency, life insurers and agents must do a better job communicating with policyholders about what they are buying.(Life)
March 1, 2005... The genius of life insurance is its simplicity. When all the words, jargon and hype are stripped away, what's left is all that counts--a promise to pay. Whether it's tomorrow or 60 years from now makes no difference. Life insurance is based on...

Allstate Life Insurance Co.(New Products and Services)(Brief Article)
March 1, 2005... Allstate Life Insurance Co. has re-launched its Advisor Variable Annuity to add several living benefits for additional charges. One of them, the Spousal Protection Benefit, is unusual in the industry in that it provides a death benefit to the...

Hartford Life Insurance Co.(New Products and Services)(Brief Article)
March 1, 2005... Hartford Life Insurance Co. has created for its variable annuities Principal First Preferred, a guaranteed minimum withdrawal benefit that costs less than Principal First, its original withdrawal rider. The new rider guarantees withdrawals of...

Habersham Funding LLC.(New Products and Services)(licensed in Ohio)(Brief Article)
March 1, 2005... Atlanta-based Habersham Funding LLC has become licensed in Ohio to engage in life settlements, which enable seniors who no longer want or need their life policies to receive cash for them. M. Bryan Freeman, managing member, said the senior...

ACLI report: bank insurance sales depend on managerial commitment.(Life)(American Council of Life Insurers)(Brief Article)
March 1, 2005... Insurers have been notoriously poor at selling in banks, despite the venue's access to middle-income Americans. A recent study by the American Council of Life Insurers reports that "the onus is on the insurer to go deeper into the bank...

Manulife adopts John Hancock brand name in United States.(Life)(Manulife Financial Corp.)(Brief Article)
March 1, 2005... Manulife Financial Corp.'s line of life insurance and annuity products will be sold in the United States under the John Hancock brand, and the issuing company no longer will be Manulife USA, but John Hancock USA. The moves leverage John...

VantisLife gains Pentagon pact.(Life)(Brief Article)
March 1, 2005... VantisLife Insurance Co., operating in Connecticut as The Savings Bank Life Insurance Co., has secured an agreement with Pentagon Federal Credit Union and the Credit Union Service Organization, which provides broker-dealer services for Pentagon...

Roadblock ahead: legislation and a coalition of car manufacturers and privacy advocates are poised to restrict auto insurers' access to "black box" data.(Technology)
March 1, 2005... Key Points * An event data recorder is an electronic device that tracks information during an accident and records information for a few seconds of time before, during and after the vehicle collision. * Between 65% and 90% of new cars...

MetLife.(Web News You Can Use)(Human Life Value Calculator launched )(Brief Article)
March 1, 2005... MetLife launched a new Human Life Value Calculator, available at www.metlife.com/lifevaluecalculator, which is designed to help individuals measure their full economic value and purchase adequate life insurance protection. MetLife has been...

Progressive.(Web News You Can Use)(Progressive Insurance launches new web site)(Brief Article)
March 1, 2005... The Progressive group of companies recently launched the new Web site www.driveinsurance.com, highlighting the important role that independent agents and brokers play in Progressive's business model. Drive Insurance from Progressive is the new...

Securian Retirement Services.(Web News You Can Use)(PlanLaunch service launched)(Brief Article)
March 1, 2005... Securian Retirement Services, a business unit of Minnesota Life, recently announced PlanLaunch (www.securian.com/Pension/range.asp) for employers to streamline the process of changing retirement plan providers. The primary benefits of the site...

Marshall & Swift/Boeckh.(Web News You Can Use)(partners with AMS-Rackley)(Brief Article)
March 1, 2005... Marshall & Swift/Boeckh has partnered with AMS-Rackley to provide real-time access to home valuations for multiple carriers. The springboard for multiple-carrier access is AMS-Rackley's SETWrite, a new Web-based rating product that provides...

Massachusetts aims for electronic health records system in five years.(Technology)(Brief Article)
March 1, 2005... Massachusetts doctors could access patients' records from anywhere in the state within five years, according to an electronic health records program that aims to improve care and reduce medical errors. The eHealth pilot program would allow...

Aon's U.K. unit launches system to speed processing, reduce errors.(Technology)(Brief Article)
March 1, 2005... Broker and consultant Aon Ltd. has launched an electronic communications system that it hopes will speed policy processing, improve administration and bolster both transparency and contract certainty. The system, known as Aon Broking...

Restricted access: a proposed model law would limit insurers' use of claims databases as underwriting tools, but some agents say that's OK.(Agent/Broker)
March 1, 2005... Key Points * Insurance legislators plan hearings this month on a proposed model law that would restrict insurers' use of automated claims databases as underwriting tools. * The concern is that the use of loss-history databases for...

What agencies really want: a central database for prospects and clients would be part of an ideal agency management system.(broker)
March 1, 2005... Technology has changed the business world by speeding up various processes, providing easy access to information, and raising the possibility and expectation of immediate service. Technology also has benefited American industry by increasing...

Body guards: a growing number of celebrities are protecting their livelihoods by insuring their physical assets.(Health/Employee Benefits)
March 1, 2005... Key Points * A number of celebrities have had various body parts insured to protect against injury or illness. * Celebrities' legs have been a popular body part to insure. * Lloyd's of London has issued many of the celebrity...

A little help from the court: the recent Cooper vs. Aviall decision may help insurers with environmental liability claims, but the claims won't go away and adjusters need to know the nuances of the ruling.(Regulatory/Law)
March 1, 2005... Key Points * Cooper vs. Aviall prevents some recoveries of environmental contamination cleanup costs under the Superfund statutes. * Some observers predicts a severe slowing of new claims for recovery by claimants pursuing voluntary...

Sowing a lawsuit: a top court rules that when a farmer collects patented seeds, it goes beyond the terms of his liability policy.(Regulatory/Law)
March 1, 2005... Seeds sprout, both literally and figuratively. One sprout, the Mississippi Supreme Court's September 2004 decision in Farmland Mutual Insurance Co. vs. Scruggs, sprang a variety of insurance issues. Scruggs involved what the court viewed to be...

Way to grow: Unitrin chief executive tells why the company chose its latest acquisition and predicts more renewal rights transactions in the industry in 2005.(Richard Vie on hot seat)(Interview)
March 1, 2005... Key Points * Unitrin Inc. acquired Kemper Auto & Home as a renewal rights transaction, meaning Unitrin took on Kemper's management, employees, offices and systems with none of the existing liabilities. * In 2004, Unitrin decided to...

Reality check: the insurance industry has the opportunity to upgrade the most important part of its business--the people.
March 1, 2005... The property and casualty sector faces huge challenges. Investors undervalue our stocks due to relatively poor returns as compared with other sectors. They also are concerned about the volatility of our business, the relatively mature market in...

Chubb covers affluent flyers.(Signature Passport policy)(Brief Article)
March 1, 2005... Chubb is reaching out to its affluent customers who fly frequently on business or for leisure. Its Signature Passport policy features up to $250,000 in coverage for emergency treatment at an advanced medical facility. The policy will pay for...

Tower's 'Worry' campaign tickles New Zealand.(advertising campaign)
March 1, 2005... Brown, furry creatures called Worries are the stars of a popular advertising campaign in New Zealand. The television commercial was developed from Tower Insurance Ltd.'s company objective--"to help customers feel sure their insurance is sorted,...

Willis to acquire California employee-benefits broker.(Companies)(Willis Group Holdings Ltd.)(Primary Worldwide Corp.)(Brief Article)
March 1, 2005... Global insurance broker Willis Group Holdings Ltd. has agreed to acquire a California-based agency specializing in employee benefits. Primary Worldwide Corp., based in Los Gatos, Calif., has annual revenue of about $4 million. It provides...

European Union approves Fortis joint venture in Portugal.(Companies)(Brief Article)
March 1, 2005... Fortis, the Dutch-Belgian financial services giant, said the European Union granted final approval for a bancassurance joint venture in Portugal that Fortis said would be the market leader in that country for life insurance. The joint...

Ace Ltd. consolidates European lines in London.(Companies)(Brief Article)
March 1, 2005... Ace Ltd. said its European operations have been consolidated into one London based platform regulated by the U.K. Financial Services Authority. The consolidation was completed with the successful transfer of the insurance and reinsurance...

Lloyd's U.S. headquarters to move to MOMA office tower.(Companies)(Lloyd's of London)(Museum of Modern Art)(Brief Article)
March 1, 2005... Lloyd's of London is moving its New York City headquarters from a nondescript building on Fifth Avenue to a new office tower owned by the Museum of Modern Art, just five blocks to the north. The 5,000 square feet of new office space is on...

Aon risk providing brokerage for freedom tower in NYC.(Companies)(Aon Risk Services Companies Inc.)(Brief Article)
March 1, 2005... Aon Risk Services Inc. has been made insurance broker for the construction of the Freedom Tower, the 1,176-foot-tall building that will replace the World Trade Center. Aon said it would arrange for construction insurance, as well as...

John Hancock restores name to agency network.(Companies)(John Hancock Financial Services Inc.)(Brief Article)
March 1, 2005... John Hancock Life Insurance Co. has decided to restore its brand name to its career agency system after nearly six years as Signator Financial Network. The new name will be John Hancock Financial Network. The company also plans to increase...

AMEX spinoff gives shareholders 2-for-1 deal.(Companies)(American Express Co)(Brief Article)
March 1, 2005... American Express Co. said it would spin off its American Express Financial Advisors unit to shareholders, who are expected to receive 100% of the common shares in a tax-free distribution. Created to enable the company to focus on other...

Cathay is first Taiwan insurer to set up shop in China.(Companies)(Cathay Life Insurance Company Ltd.)(Brief Article)
March 1, 2005... Taiwan's largest life insurer is doing business in mainland China through a joint venture with a Chinese airline, the first life insurer from Taiwan to do so. Cathay Life Insurance Co. Ltd. has set up operations in Shanghai through a joint...

Who wants to be a space tourist? As insurers gear up to insure the fledgling commercial space travel industry, take a look at who wants to be a space pioneer.(space tourism survey)
March 1, 2005... So, you'd like to go to space? You're not alone. The National Space Society, a nonprofit organization, reports that 60% to 80% of people surveyed in Japan, Canada, the United States and Europe are interested in going to space and would be...