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JUDGE DECLINES TO ISSUE STAY OF CIGNA REORGANIZATION PLAN
HARRISBURG, Pa.-A Pennsylvania appellate court judge will not step into the fray between CIGNA Corp. and critics of its reorganization plan-at least for now.
Commonwealth Court President Judge James Gardner Collins on Thursday refused to issue a 15-day stay of any approval order by Pennsylvania Insurance Commissioner Linda S. Kaiser to allow an appeal before the plan is implemented. Some competing insurers and CIGNA policyholders fear that if the plan is approved, CIGNA immediately would split into an active operation for ongoing business and a runoff operation for its long-tail liabilities. That would make reversing the reorganization almost impossible, they said.
Judge Collins also refused to order courtroom-type hearings on the plan so critics could cross-examine CIGNA officials and actuaries. Ms. Kaiser, who could rule on the plan this week, held three hearings at which witnesses only read prepared statements.
The judge has not yet released a full opinion. The motions were filed last month by units of American International Group Inc., The St. Paul Cos. Inc. and Chubb Corp. (BI, Dec. 25, 1995).
CIGNA is pleased that regulators can make a decision the state Legislature "has deemed is theirs to make," a spokesman said.
The setback for critics, though, would not prevent them from seeking judicial relief, if necessary, after Ms. Kaiser's ruling, said Florence A. Davis, vp and general counsel for AIG in New York.
On Friday, the last day for public comment, several insurer and policyholder critics filed a statement with the department that distinguished CIGNA's plan from recent reorganizations of other insurers-like Home Holdings Inc. and Crum & Forster Inc.-as well as CIGNA's 1994 "mini-restructuring."
X.L. OFFERS PRIMARY D&O COVER
HAMILTON, Bermuda-Trying to attract policyholders that want all their directors and officers liability coverage from one source, X.L. Insurance Co. Ltd. is now writing primary coverage up to $50 million.
The broad form is only side A coverage, which applies to individuals, not side B coverage, which is for corporations, and it will be offered on a primary and a difference-in-conditions basis.
The primary coverage can be written in combination with X.L.'s excess coverage, which is $25 million excess of $20 million and includes side B coverage. But the maximum limit for primary and excess will be $50 million.
With new approaches to structuring programs and greater appetite for risk, more companies are focusing only on individual coverage, explained Jim Ansaldi, senior vp in the D&O department at X.L.
Other new offerings are: a simplified version of its following form lawyers professional liability policy; a $5 million sublimit for punitive damages on the lawyers policy; following form coverage on its other professional liability coverages; and new policies, with $5 million limits, to cover employment practice and outside director liabilities.
LLOYD'S MOTIVES QUESTIONED
LONDON-Lloyd's of London's large underwriting capacity this year, mainly achieved by taking on more corporate membership, could be a sign that the market wants to discourage investment by individual names, a leading Lloyd's underwriting agency charges.
Lloyd's 1996 capacity of 9.85 billion ($15.2 billion) is "more than many think desirable," says Christie Brockbank Shipton Ltd. in its January market review, CBSL News.
"Given that some managing agents make little attempt to conceal their irritation with traditional names, one is tempted to speculate about a hidden agenda," the review said, referring to a possible attempt to dilute returns to drive out individual investors.
A spokesman for Lloyd's, which first allowed corporate capital in 1994, said both limited and unlimited liability investors are welcome.
NATIONWIDE VOTES WITH ITS FEET
COLUMBUS, Ohio-Nationwide Mutual Insurance Co. will cease writing all property/casualty business in Massachusetts and transfer its $23 million book of P/C business to Arbella Mutual Insurance Co.
Claiming that doing business there has become too difficult and expensive, Nationwide last week said Arbella, of Quincy, Mass., will take over its 34,000 policies, most of which are auto policies. No money will change hands in the deal.
Policies will be transferred gradually as they expire, beginning this quarter. Nationwide, which began doing business in Massachusetts in 1961, will continue to write life and annuity business there.
Arbella was formed in 1988 to cover the business of the Kemper Group when it pulled out of Massachusetts.
NAIC EXECUTIVE VP STEPS DOWN
KANSAS CITY, Mo.-The National Assn. of Insurance Commissioners is searching for a new top staffer after Executive Vp David B. Simmons resigned unexpectedly, effective March 15.
Mr. Simmons, 46, had been with the NAIC for eight years, including four as general counsel. In an interview, he said the recent release of salary data for NAIC executives-including $165,000 for him-was not a factor in his departure. Mr. Simmons said he expects to join a law firm doing regulatory work, preferably in the Kansas City area.
Regulatory policy matters are being referred to Kevin Cronin, the NAIC's Washington counsel who is acting executive vp.
President Clinton last week signed into law legislation that bars states from taxing pensions of retirees who no longer live in the state. It applies to benefits received after Dec. 31, 1995 (BI, Jan. 8)...Thomas Crawford, former president and chief executive officer of Southern Heritage Insurance Co., has been named to those posts at Prudential Property & Casualty Co. in Newark, N.J. He succeeds Larry Sundram, who is returning to the marketing department...John R. Berger has been named president of USF&G Corp.'s F&G Re Inc. unit in Morristown, N.J., succeeding Paul B. Ingrey, who will become chairman.