IBM, plaintiffs in talks over cash balance suit

IBM Corp. said it is discussing with plaintiffs a possible resolution of remedies and claims stemming from a district court ruling involving its cash balance pension plan. Last year, in a decision that generated national publicity, Judge G. Patrick Murphy for the U.S. District Court for the Southern District of Illinois ruled that IBM's cash balance plan discriminated against the company's older employees. While Armonk, N.Y.-based IBM said it plans to continue through the appeals process to defend the legality of its plan, it said that the "parties are in discussions regarding a possible resolution of some of the remedies issues and/or claims." Judge Murphy has agreed to delay a decision on remedies in the case.

Premium hikes slow for federal health plans

Insurance premiums for health plans covering federal employees will rise by an average of 7.9% next year-down from 10.6% in 2004-marking the first time since the late 1990s that the increase has been in single digits. Federal officials cited several factors behind the moderation, including greater competition among insurers. The Federal Employees Health Benefits Program is the nation's largest group benefits program, with more than 8.5 million participants. On average, the federal government pays 70% of participants' premiums.

NAIC elects three as interim officers

The National Assn. of Insurance Commissioners elected three interim officers at the organization's fall quarterly meeting in Anchorage, Alaska, last week. Diane Koken, Pennsylvania's commissioner of insurance, was elected president. In addition, Joel Ario, Oregon insurance administrator, was named vp, and Alessandro Iuppa, Maine's superintendent of insurance, was elected secretary/treasurer. The elections were necessitated by the recent resignations of President Ernst Csiszar and Vp Jim Poolman. The new officers will serve until annual elections are held at the NAIC's winter quarterly meeting, scheduled for Dec. 4-7 in New Orleans.

PacifiCare adds products, members with AMS buy

PacifiCare Health Systems Inc. has agreed to buy health insurer American Medical Security Group Inc. for about $502 million. The acquisition of Green Bay, Wis.-based AMS will bring more than 314,000 commercial preferred provider organization members, boosting PacifiCare's commercial membership by more than 13%. The acquisition will also expand the company's product offerings to include health savings account and group life products, noted Cypress, Calif.-based PacifiCare.

California mandates domestic partner cover

California Gov. Arnold Schwarzenegger has signed legislation requiring California insurers and health plans to cover registered domestic partners to the same extent that they cover spouses. Under current law, plans and insurers must provide coverage for domestic partners, but only to the extent it is provided for dependents. The bill, A.B. 2208, was sponsored by Assemblywoman Christine Kehoe, D-San Diego.

Heath Lambert offers cargo cover in Iraq

Heath Lambert Group Ltd. has launched specialty coverage for companies transporting cargo into and out of Iraq. In addition to providing standard physical loss and damage cover, the program will offer optional coverage for war risks, worker strikes and terrorism, the London-based brokerage said. Coverage is written at Lloyd's of London. A Heath Lambert spokesman declined to say how much capacity is available but described it as "substantial" and said there are deals underway to provide limits of between $20 million and $30 million.

Program to reward docs for good diabetes care

Two Harrisburg, Pa.-based managed care companies are launching a new pay-for-performance initiative to promote better care for the diabetic patients enrolled in their plans. Under the program, HealthAmerica and HealthAssurance, will pay quarterly bonuses of $25 per patient to physicians who meet standards for diabetic patient care set by the National Committee for Quality Assurance's Diabetes Physician Recognition Program. Such standards include glucose control; blood pressure control; control of blood lipids; and preventive care practices for eyes, kidneys and feet.

Reinsurers face threats to profitability: Best

Worldwide reinsurance rates are too low to sustain profitability, despite the hard market of the past three years, according to A.M. Best Co. Although many reinsurers have made underwriting profits over the past two years, rates have weakened in several lines this year, said Jose Sanchez-Crespo, general manager of Best's London office, commenting on the Oldwick, N.J.-based rating agency's "Global Reinsurance" report. In the United States, rate decreases and recent hurricane losses may cause the overall U.S. reinsurance market to report an underwriting loss for 2004, he said.

Briefly noted

Minneapolis-based UnitedHealth Group Inc. has settled a class action lawsuit over its prescription drug co-payments for $9.95 million, plus administrative costs that bring the total cost of the settlement to $11.15 million. The lawsuit alleged pharmacies were improperly allowed to collect full co-payments on inexpensive drugs from UnitedHealth members....Houston-based Enron Corp. will contribute $321 million from the sale of a pipeline unit to an escrow account to fully fund and then terminate four defined benefit pension plans as part of an agreement with the Pension Benefit Guaranty Corp....Oklahoma's Senate has set a date of Sept. 27 for a trial to determine whether Insurance Commissioner Carroll Fisher should be removed from office. Mr. Fisher, who is seeking a stay of the proceedings, recently was impeached by the state House on allegations that he embezzled insurance education funds and operated a children's charity illegally.