E.U. official backs away from broker pay rules
EDINBURGH, Scotland — The European Commission will not take regulatory enforcement action against insurers and brokers for breaches of E.U. competition law in the short term, but it has not ruled out a future regulatory response. Last year, the Commission issued its report concerning competition in the business insurance sector, highlighting concerns with processes in […]
Psst! Wanna lightly used backhoe?
Here’s one for the bumbling bandit blotter. South Carolina law enforcement officials were able to recover $4 million worth of stolen excavators, bulldozers, backhoes and other similar equipment after two thieves attempted to launder their stolen Caterpillar Inc. backhoes with each other. According to the National Equipment Register, which interviewed a senior special agent involved […]
Woman sees red when hit by thong
A 52-year-old woman is suing Victoria’s Secret over a thong gone wrong. In a products liability lawsuit filed in Los Angeles, Macrida Patterson claims a heart-shaped metallic decorative piece on a Victoria’s Secret Sexy Little Thing low-rise v-string scratched her cornea, according to published reports. The metal piece snapped and flew at her as if […]
Conn. captive legislation a welcome development
AN ILLUSTRATION of how attitudes about the captive insurance industry have changed came with Gov. M. Jodi Rell’s recent signing of legislation that permits formation of captive insurers in Connecticut. Years ago, it would have been inconceivable that captive legislation would be passed in Connecticut, a bastion of the traditional commercial insurance industry and where […]
Schillerstrom
E.U. auditor liability caps proposed
BRUSSELS, Belgium — The European Commission this month issued its long-awaited recommendation on the limitation of auditor liability. Though the move was welcomed by auditor groups, the proposal has met with opposition from insurer representatives. The recommendation allows E.U. member states to determine for themselves the most appropriate way to limit liability within the scope […]
Mortgage meltdown may spawn more suits
The litigation tentacles reaching out of the subprime mortgage mess could entwine corporate prey well beyond the financial institutions and individuals blamed for creating the debacle and resulting credit crisis, some insurance and legal experts say. Errors and omissions liability litigation could envelope companies that facilitated home purchases by subprime risks who eventually defaulted, they […]
Plaintiffs target financial firms
Since February 2007, when the first of the subprime-related securities class action lawsuits was filed against mortgage lender New Century Financial Corp., plaintiffs have filed 89 such cases, according to the Stanford Law School Securities Class Action Clearinghouse of Palo Alto, Calif., in cooperation with Cornerstone Research of Boston. Nearly all of the lawsuits have […]
Flu season boosts costs for managed care firms
Most of the major managed care companies reported lower profits in the first quarter of 2008 amid a severe flu season and a weakening economy that likely will lead to commercial enrollment declines. Medical cost and rate increases likely will hover around 8% for this year, according to several of the health insurers. Indianapolis-based WellPoint […]
Courts must consider claim conflicts
Lower courts should consider an insurer’s potential conflict of interest when reviewing a denial of employee benefits in which the insurer both determines and pays the benefits, a divided U.S. Supreme Court ruled last week. In Metropolitan Life Insurance Co. vs. Wanda Glenn, the court upheld a 2006 ruling by the 6th U.S. Circuit Court […]
Captives can provide effective protection for D&O exposures
TO THE EDITOR: A June 9 article on subprime loan-related class action suits quotes Dan Vecchio of Wells Fargo Insurance Services Inc. on using captives for directors and officers liability coverage. In the article, Mr. Vecchio says employing a captive would amount to trying to “set up a round D&O coverage to fit in a […]
Award to honor top benefit managers
Know an outstanding professional employee benefit manager? Nominate her or him for Business Insurance’s 2008 Benefit Manager of the Year award. BI created the Benefit Manager of the Year award in 2005 to recognize excellence in administering employee benefit programs. Readers of the magazine are invited annually to submit nominees for this award. An independent […]
Risk managers unconcerned by change in AIG leadership
Risk managers who place business with American International Group Inc. say they do not expect, at least for now, any change in their relationship with the insurer in light of the appointment of new Chief Executive Officer Robert B. Willumstad. In fact, some say the change could help risk managers. “We’ve always had a good […]
Under fire, AIG banks on Willumstad
NEW YORK — American International Group Inc.’s new chief executive officer, Robert B. Willumstad, brings a strong financial services background to his position, but his tenure may not be a long one, observers say. The absence of insurance in Mr. Willumstad’s background has troubled some, observers say. The insurer’s newly appointed CEO served as president […]
New CEO extends a hand to longtime leader
NEW YORK — Newly named American International Group Inc. Chief Executive Officer Robert B. Willumstad met last week with former Chairman and CEO Maurice R. Greenberg, a move that observers said is “peculiar” but also makes sense. Mr. Willumstad, who disclosed his plan to meet during an analyst call shortly after his appointment, had a […]
Sullivan credited for seeing AIG through rocky period
Industry observers hold Martin J. Sullivan in high regard despite his abrupt dismissal earlier this month as president and chief executive officer of American International Group Inc. AIG’s board removed Mr. Sullivan during an emergency board meeting and named Robert B. Willumstad, the insurer’s chairman, as the next CEO. Observers say Mr. Sullivan did well […]
Market Moves
UnitedHealth buys stake in Sedgwick CMS’ parent MEMPHIS, Tenn.– Minnetonka, Minn.-based UnitedHealth Group Inc. said it has purchased a minority interest in Fidelity Sedgwick Holdings Inc., the parent company of Sedgwick Claims Management Services Inc. in Memphis, Tenn. UnitedHealth did not disclose the price paid to principal shareholders of Fidelity Sedgwick Holdings. Separately, UnitedHealthcare, a […]
Core strengths of AIG shouldn’t be changed
THE NEW CEO of American International Group Inc., Bob Willumstad, has a lot of work ahead. After a $7.8 billion first-quarter loss largely due to credit default swaps, a group of major shareholders demanded the removal of Martin Sullivan, and AIG’s board tapped its chairman to take on the CEO’s mantle too. Mr. Willumstad brings […]
Pint-size exposures draw insurer’s interest
By definition, microbreweries and brewpubs aren’t exactly big businesses. In fact, according to Hartford Financial Services Group Inc., craft beer operations account for only about 4% of the U.S. beer market. But just because they’re small doesn’t mean that microbreweries and brewpubs don’t have insurance needs just as their much larger competitors do. So Hartford […]
Firm fires workers for juiced-up Rx claims
Dozens of workers at the government-owned electric power company in Puerto Rico reportedly have been accused of using their health insurance to pay for $1.8 million in steroids. Jorge Rodriguez, director of the San Juan-based Puerto Rico Electric Power Authority, last week told a local radio station that 80 employees could lose their jobs as […]