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Lloyd's of London and other British insurers are prepared for a claim of close to $8 million in the wake of the sinking of the once-stately Queen Elizabeth luxury liner. Lloyd's portion of the loss is expected to be about $3 million.
Almost three-fourths of the insurers -- 255 companies -- registered in the Bahamas prior to 1970 are eliminated in a government crackdown on suspect Bahamas-based insurance operations.
Colorado becomes the first state to enact legislation encouraging the formation of captives that may underwrite corporate risks on domestic exposures.
Widespread changes in state labor laws, Social Security and government hiring, promotional and retirement policies may come if 38 states ratify the Equal Rights Amendment passed by the U.S. Senate.
Labor Department insiders say staffers are working hard on a system of self-inspection to help reduce on-the-job injuries and accidents. The plan would appeal to the budget-conscious Nixon Administration in fostering compliance without hiring thousands of inspectors.
Company officials say the 20% increase in Social Security payments President Nixon signed into law will have varying effects on employers.
More than a million California union workers have coverage that is completely employer-paid to help with hospital, surgical and other medical costs for the workers and their families.
The Food and Drug Administration raises eyebrows with its announcement that the "National Electronic Surveillance System" has been put into service, connecting 119 hospital emergency rooms in 30 states with a computer in Washington. The system will provide "a daily nationwide summary of household accidents."
The National Assn. for Female Executives is working with CNA to design group insurance plans tailored to the lifestyle and independent financial status of women executives.
The move is a response to income protection insurance policies that generally will provide a woman executive only half the coverage a man gets even if she makes more money than him and life insurance that covers her with a spouse add-on clause to her husband's policy rather than offering her a high-limit policy for herself.
International Business Machines Corp. adds an adoption assistance plan to its employee benefit program. It is believed to be the first of its kind by a major U.S. employer. The plan will pay 80% of eligible expenses up to a total of $800 for each adoption. The benefit enhancement was made because "it just seemed like a good, equitable thing to do," said an IBM spokesman.
Monty Hall, television host of game show "Let's Make A Deal," has been insured for $1 million. Mr. Hall's safety has been in question at times as frenzied prize winners, garbed in bizarre costumes, beat him from the sheer ecstasy of landing a great American windfall. Hatos-Hall Productions Inc., which produces the program, has obtained a Lloyd's of London policy on Mr. Hall. The policy covers disabling injury or death incurred during the show.
Coverage in excess of $6 million is put together in London and spread among a number of large insurers to cover Secretariat, the horse favored to win the Kentucky Derby. The policy covers all risk of mortality from disease or accident and against possible sterility of the horse when it reaches siring age. Johnson & Higgins engineered the policy.
Fearful of product liability lawsuits, General Motors equips its 100,000 1974 cars containing optional air bag safety equipment with electronic recording devices capable of providing information about the new system's performance during a collision. The devices are designed to help refute claims by owners of air bag-equipped cars that the system malfunctioned in some way.
Blue Cross of New York will offer its first pre-paid group health plan ever at the Long Island Jewish Hillside Medical Center. A full range of clinic and hospital services will be available under the new plan for a single monthly premium. Tentative rates have been set at $23 for a single person, $46 for two, and $70 for more than two.
Betty Grable's death on July 2 brings to an end an insurance legend: the girl with the million-dollar legs. The 20th Century-Fox film studio claimed in the 1940s it insured Miss Grable's famous "gams" for $1 million with Lloyd's of London. Whether the policy was ever actually written remains a mystery. No written record of it exists at Lloyd's or the studio.
The national energy crisis is not a major worry for corporate risk managers, they tell BI in an informal survey. Most of the risk managers said their companies had experienced no problems due to the energy crisis and that they did not expect any in the future.
A bill that would limit private expenditures for medical care in the case of catastrophic illness is introduced in the Senate. The bill, introduced by Sens. Abraham Ribicoff, D.-Conn., and Russell Long, D.-La., would limit individuals' expenses to $2,000 and the first 60 days of hospitalization. It also would make available a "certified private insurance policy at a reasonable cost" to cover those expenses. And, low-income people would have all health expenses paid by a federal program.
President Nixon signs into law only two days before the end of 1973 a bill requiring all employers with more than 25 employees to offer optional enrollment in an HMO if one is available in the area.
The Health Maintenance Organization Act of 1973 authorizes $375 million over the next five years for evaluation and organization of HMOs around the country. There are an estimated 115 such group practices currently in operation.
B.F. Goodrich discloses that it has traced four worker deaths to a rare cancer caused by vinyl chloride, making it a major new occupational hazard.
The Nixon administration proposes a national health insurance plan that would require employers to offer a group health insurance plan that includes elements of "basic coverage," including unlimited hospital and physician services, payment for out-of-hospital prescription drugs, prenatal and maternity services, limited mental health care and well-child care. Administration officials estimate the plan will cost employers between $310 and $415 per full-time worker.
George Foreman, the boxing heavyweight champion, is protected by an American International Underwriters Corp. 24-hour, all-risk accident policy until he steps into the ring in Caracas, Venezuela, March 26 to defend his title against Ken Norton. Purchased by Video Techniques Inc., the $350,000 policy covers the company's interests in Mr. Foreman should he be unable to fight because of an accident prior to the bout.
The worst air crash in history occurs when a Turkish Airlines DC-10 jumbo jet goes down outside Paris, killing 346. Lloyd's of London and the London market have the majority of the $20 million hull coverage. Passenger liability claims are expected to add an additional $10 million to $20 million in losses. In addition, the possibility exists of liability suits against the plane's manufacturer, McDonnell-Douglas Corp., because the crash occurred when the plane lost its cargo door.
A federal district judge rules that General Electric Co. was guilty of sex discrimination because it denied disability benefits to its pregnant employees. The judge found GE's policy to be in violation of the Civil Rights Act of 1964. GE is expected to appeal the decision.
By his resignation, President Nixon preserves his employee benefits, which include an annual $60,000 pension for life. Mr. Nixon probably would have lost his benefits had he been impeached. He still could lose his benefits if he is indicted and prosecuted for his role in the Watergate cover-up.
Pension reform fallout is expected as soon as President Ford signs the Employee Retirement Income Security Act of 1974, a move expected on Labor Day. A "suicide" loophole is expected to trigger an unknown number of plan terminations, which may hit the Pension Benefit Guaranty Corp., a federal agency created under ERISA.
Motorcycle stuntman Evel Knievel's Snake River Canyon jump spectacular on Sept. 8 requires him to provide more than $1 million in liability insurance to protect his audience and the grounds they use while watching his jump. Mr. Knievel attempts to ride a rocket-powered motorcycle across the canyon, which is 1,600 feet wide and 540 feet deep, but the ride is cut short when his drogue parachute opens prematurely. He opens his main chute in time to land safely on the canyon bottom.
A flurry of litigation is initiated in the wake of a growing controversy over the effectiveness and safety of the Dalkon shield.
Railroad property and liability underwriters are moving out of the market so fast it's hard to say who is writing the business anymore. Recent government publicity describing as potential bombs railroads that transport dangerous materials, coupled with publicity about the extremely poor maintenance of roadbeds by the railroads, has forced insurance rates skyward while deductibles have doubled.
The Ford administration will not submit a national health insurance proposal to Congress in 1975, and President Ford is "almost certain" to veto any national health insurance measure passed by Congress this year. The decision is based on the state of the economy and President Ford's one-year moratorium on all new federal spending programs.
More companies are using self-insured employee benefit programs, according to a Fortune Market Research study of the top 1,000 U.S. industrial corporations.
Burmah Oil & Gas Co. completes a record-size placement of an offshore oil drilling risk into five layers with coverage written jointly by more than 100 insurers. The complex structure of the placement will save Burmah significant premium dollars.
The U.S. Supreme Court overturns a long-standing maritime liability law, establishing in its place a comparative negligence rule for assessing ship collision damages. Previously, financial responsibility was split evenly between parties involved regardless of fault.
A bipartisan effort is under way to amend the Health Maintenance Organization Act of 1973. Identical bills have been introduced in the Senate and House to change the act to reduct the burdens it places on employers and to cut the cost of the benefit programs HMOs must offer.
Gulf Oil Co., one of the founders of Oil Insurance Ltd., the petroleum industry's mutual insurance company launched in 1971, is withdrawing from OIL effective Jan. 1, 1976. The mutual's largest member, Gulf's pullout will mean a loss of $1 million in premium income for OIL.
Five lawsuits against Mattel Inc. are settled out of court for $30 million, by far the largest directors and officers settlement in history. The settlements involve class-action lawsuits filed in 1973 and 1974 charging securities law violations. Three groups of Mattel's D&O underwriters -- Lloyd's of London and the London market, International Surplus Lines Insurance Co. and Unigard Insurance Group -- will pay a total of $13.8 million of the settlement.
In five years, property/casualty self-insurance will increase by 50% due to corporate economizing, Time Inc. predicts. Employee benefits self-insurance is likely "to double" in this period, Time's marketing department found in a survey of more than 500 corporations.
A U.S. Tax Court ruling in a petition filed by Ford Motor Co. is expected to have a major impact on the future of captive insurance companies. The case, generally considered a landmark for captives, involved a petition filed by Ford as the result of a $6.6 million assessment by the Internal Revenue Service on premiums paid by Ford's foreign subsidiaries into its Bermuda-based captive, Transcom Insurance Co. Ltd. The IRS claims "payments from foreign subsidiaries (to captives) are receipts of dividends to the domestic corporation advanced to the offshore company," because by insuring risk in a wholly owned captive, the economic loss remains in the corporate family.
The first of what is expected to be a multimillion dollar series of lawsuits filed by relatives of the crew of the Edmund Fitzgerald, an ore boat that sank in Lake Superior last month, are filed in district court. Relatives of two of the 29 crew members, all of whom died when the ship sank during a severe storm on the lake, file a $2 million lawsuit. The suit charges negligence in the way the vessel was loaded.
The recent growth in medical malpractice lawsuits and awards adds significantly to the cost of insurance for physicians and hospitals this year and will add to health care costs for everyone, according to the Health Insurance Assn. of America. The HIAA said malpractice insurance costs to physicians and hospitals in 1975 was $1.5 billion, a 25-fold increase from $60 million in 1960.
Three property insurers share the brunt of the coverage for a bombing of LaGuardia Airport on Dec. 29, 1975, during the height of the Christmas rush. Kemper Insurance Cos., Federal Insurance Co. and Arkwright-Boston Insurance Co. all have policies that will be triggered as a result of the bombing, which ripped through a locker area, killing 11.
The Supreme Court in March refuses to expand the 1934 Securities-Exchange Act to include negligence as a basis for civil suit by victims of fraud. The court said Ernst & Ernst, one of the "Big Eight" accounting firms, could not be sued for failing to uncover a securities swindle carried out by a firm it audited. The decision should ensure that accountants' liability insurance remains available, though rates are not likely to drop soon.
Acting Federal Insurance Administrator J. Robert Hunter has warned the insurance industry to clean up its own act quickly or face federal action. Mr. Hunter told the Independent Insurance Agents of Wisconsin that though insurers' financial situation is improving, he fears they may be implementing excessive rate increases.
In an effort to control health care costs, the major automakers, the United Auto Workers and Michigan Blue Cross-Blue Shield set up a voluntary pilot program providing coverage for second opinions in elective surgery cases.
Reforming the McCarran-Ferguson Act, which for more than 30 years exempted the insurance industry from antitrust laws, would bring about the benefits of more competition and less regulation for industry and consumers alike, suggests a top Justice Department official.
A majority of U.S. employers offer dental benefit plans, according to the first-ever Business Insurance Employee Benefit Board survey. The survey of 90 benefit managers shows that more than 60% have dental plans, covering a total of 1.5 million workers, and other companies intend to iomplement the plans soon.
The unexpected August resignation of James D. Hutchinson, administrator of ERISA for the Labor Department, is a dramatic sign that crucial administrative problems still exist after two years of hammering out the meaning and workings of the complex pension reform law.
Private sector U.S. companies paid an average of $3,984 per worker for employee benefits in 1975, a 23% increase over costs only two years ago.
Despite good loss experience this year, especially in the liability area, the overwhelming majority of insurance managers on BI's Editorial Advisory Panel expect premiums to continue to climb though the end of this year. All of the panelists who have already gone through renewals report that rates increased across the board from 10% to as much as 450%.
The Supreme Court rules that excluding pregnancy from disability insurance is not discriminatory, reversing rulings by six courts of appeal, including the ruling in the General Electric Co. case before the court. Legislators immediately begin considering amending Title VII of the Civil Rights Act to circumvent the decision.
Even as they struggle under huge premium increases for group health insurance during 1976, employee benefit managers say they expect more of the same next year. As a result, the benefit managers on Business Insurance's Employee Benefit Board say they are seriously considering internal funding programs for employee benefits, either through tax-sheltered trusts or other types of self-insurance.
A 25% increase in the membership of Lloyd's of London assures greater capacity for Lloyd's during 1977. More than 2,400 new names will be joining Lloyd's syndicates during the next year, bringing the total number of names to more than 10,000 and providing additional capacity. However, many at Lloyd's note that much of the added capacity will be eaten up by inflation. Because of inflation, experts estimate the actual gain in capacity at Lloyd's from the 25% increase in membership will be only 12% to 15%.