BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
EXEL ENTERS U.S. MARKET WITH FOLKSAMERICA ACQUISITION
NEW YORK-EXEL Ltd. will directly enter the U.S. insurance market with the purchase for about $10 million of Folksamerica General Insurance Co., a shell company owned by Folksamerica Reinsurance Co. in New York.
Folksamerica General does not write any business, but it is licensed as an insurer in 20 states and as a reinsurer in 11 states. It has assets of $7.3 million.
EXEL plans to use the company, which it will rename, to directly access the U.S. insurance market. As a Bermuda-licensed insurer, EXEL is not permitted to solicit business in the United States.
The acquisition will allow EXEL to gain greater access to middle- market accounts and financial directors to sell its new breed of financial products, such as foreign exchange insurance coverage, said Gavin Arton, senior vp-investor relations at EXEL.
EXEL also may buy an excess and surplus lines insurer in the United States.
The purchase of Folksamerica General by EXEL follows the September purchase of Westchester Specialty Group Inc. by Bermuda-based ACE Ltd., a move that gave ACE a foothold in the United States (BI, Sept. 22, 1997).
Bramson pleads guilty
NEWARK, N.J.-Insurance swindler Martin Bramson has pleaded guilty to a money-laundering charge related to his fraudulent operation of Preferred Indemnity Insurance Co. of Old Bridge, N.J.
Extradited to the United States in July after several years as a fugitive, Mr. Bramson last week admitted trying to transfer $348,000 from the United States to an account he controlled in Switzerland. The charge was part of a 29-count 1991 indictment accusing him and several others, including his brother Leonard, of secretly gaining control of Preferred Indemnity and using it and another insurer-Trans-Pacific Insurance Co. (F.S.M.) of Micronesia-to defraud medical malpractice and liability policyholders.
Mr. Bramson is scheduled to be sentenced Jan. 26 and faces a statutory maximum of 20 years in prison. Under federal sentencing guidelines, though, his actual sentence likely will range from 63 to 108 months, depending on a federal judge's decisions applying the guidelines, said Assistant U.S. Attorney Timothy J. McInnis.
Mr. Bramson still faces separate federal charges in Baltimore accusing him of operating a string of bogus offshore companies, including Trans-Pacific, International Bahamian Insurance Co., Professional Risk Insurers Management Exclusive Co. and Casualty Assurance Risk Insurance Brokerage Co.
He fled house arrest in 1991 and was a fugitive until 1995, when he was arrested while trying to enter Liechtenstein with $4.8 million in Swiss currency and gold (BI, Jan. 30, 1995).
Leonard Bramson pleaded guilty to charges in Newark and Baltimore and is serving a 118-month sentence.
Oxford announces bigger loss
NORWALK, Conn.-Oxford Health Plans Inc., which lost nearly two-thirds of its share value Oct. 27 and led a decline of HMO industry stocks, announced a poorer third-quarter performance than it had expected.
The company said last week it would have a third-quarter net loss of $78.2 million, or 99 cents per share. That is a $13 million larger loss than Oxford forecast a week before.
The net loss for the first nine months of the year was $6.6 million, compared with net earnings of $67.6 million for the first nine months of 1996.
The company blamed its dismal performance mostly on $42.2 million in adjustments it made as receivable write-offs because of late billing and termination of non-paying accounts, the result of computer problems (BI, Nov. 3).
Also last week, Andrew B. Cassidy, chief financial officer of Oxford, announced his intention to resign. Oxford said in a statement that Mr. Cassidy would stay on until a new CFO is found. His departure would be the first exit of a top Oxford executive since the stock sell-off.
The company announced Thursday it had hired Kevin F. Hickey as an executive vp focusing on operations. Formerly, Mr. Hickey was president of Health Plans of America and senior vp of operations at Aetna Managed Health Plans.
Companies, EEOC settle suits
WASHINGTON-Northrop Grumman Corp., Westinghouse Electric Corp. and the U.S. Equal Employment Opportunity Commission agreed to a $14 million settlement of two age-discrimination lawsuits and EEOC charges brought in connection with several layoffs involving about 800 former Westinghouse employees.
The settlement involves employees of Pittsburgh-based Westinghouse's defense and electronics business, which was sold to Northrop Grumman in March 1996. The bulk of the settlement involves 359 claimants involved in a 1991 layoff, including 105 plaintiffs who privately sued Westinghouse in 1993. The EEOC brought its own suit, and the two suits subsequently were consolidated.
Most of the terminated employees worked at the company's facilities at Baltimore/Washington International Airport and in Hunt Valley, Md., and held long-term professional and managerial engineering positions.
The settlement, announced Oct. 31, also includes an additional 548 employees terminated in several subsequent layoffs between 1992 and 1996 and resolves employment discrimination claims the EEOC was investigating at the administrative level, according to a joint statement that was issued.
A spokesman for Los Angeles-based Northrup Grumman said he had no additional comment; no Westinghouse spokesman could be reached.
Bill introduced on tobacco deal
WASHINGTON-A bipartisan group of senators has introduced a bill to implement the proposed global tobacco settlement.
Senate Commerce Committee Chairman John McCain, R-Ariz., said the measure was designed to "get the ball rolling." He said the bill, which he introduced last week, was "not perfect, complete, comprehensive," but was instead meant to be a basis for all parties involved in the proposed $368.5 billion settlement to begin negotiations on legislation.
The settlement reached between 40 state attorneys general and the tobacco industry would end class-action suits against cigarette makers in return for restrictions on marketing and advertisements and pay $368.5 billion to the states to cover Medicaid expenses associated with smoking (BI, June 23). The McCain bill follows the proposed agreement with the exception of earmarking some funds to aid tobacco farmers whose livelihoods are threatened by the settlement.
Senate Judiciary Chairman Orrin Hatch, R-Utah, is expected to introduce his own implementation legislation soon.
Meanwhile, Reps. Scott McInnis, R-Colo., Christopher Cox, R-Calif., and Paul McHale, D-Pa., have introduced a bill that would limit the fees of private attorneys who worked on the proposed deal to $150 per hour plus actual expenses. Attorneys also would have to present Congress with details on how much time they spent on the proposed settlement and related lawsuits before they could collect anything.
In a related development, the Health Care Financing Administration sent a letter to state Medicaid directors last week telling them Medicaid costs recouped from tobacco companies may have to be shared with the federal government.
Suzuki will appeal award
ST. LOUIS-American Suzuki Motor Corp. will appeal a St. Louis circuit court jury's decision to award $36.9 million in product liability damages, including $11.9 million of punitive damages, to a woman paralyzed in a 1990 rollover accident while riding in a Suzuki Samurai sport utility vehicle.
The Missouri Supreme Court last year overturned a $40 million award against Suzuki in the same case. That court remanded the case to a trial court after relaxing a state standard regulating when evidence of a driver's consumption of alcoholic beverages may be introduced in such cases (BI, Jan. 6).
But, in the new trial, the judge refused to admit into evidence the blood-alcohol test results of the driver. The judge also barred National Highway Traffic Safety Administration test results that Suzuki argues show the Samurai is safe, said George F. Ball, general counsel for the Brea, Calif.-based company.
Mr. Ball blamed the award largely on Consumers Union of the U.S. Inc. The consumer advocacy group has published reports that 1988 and 19881/2 Samurai models are "not acceptable" because the organization's tests show that the models are prone to roll over during hard turns. Mr. Ball said the NHTSA's refusal to recall the vehicle demonstrates it is safe.
A Consumers Union spokeswoman called the agency a "reluctant watchdog."
The NHTSA's inaction does not "exonerate" the Samurai, a spokesman said. It means the agency could not find a defect trend in those vehicles, not that such a trend does not exist, he said.
Meanwhile, Suzuki is suing Consumers Union for product disparagement and consumer fraud in a California federal district court over the organization's reports on the Samurai.
The U.S. Senate has confirmed Charles Jeffress as assistant secretary of labor in charge of the Occupational Safety and Health Administration. Mr. Jeffress previously headed North Carolina's workplace safety program. . . .The Louisiana Supreme Court has ordered a lower court to reconsider a $2.5 billion "exemplary damages" award-Louisiana's equivalent of punitive damages-made against Jacksonville, Fla.-based CSX Transportation Inc. in a class-action suit stemming from a 1987 tank car leak and fire (BI, Sept. 15). The high court said the lower court made the award before adjudicating all liability issues connected to the case. . . .Dow Jones & Co. will appeal a federal judge's ruling letting stand a $22.7 million libel award against the company stemming from a 1993 article in The Wall Street Journal about a now-defunct Houston brokerage firm, MMAR Group Inc. In March, a federal jury in Houston awarded MMAR $22.7 million in actual damages and $200 million in punitive damages, though a Houston federal district court judge threw out the punitive award in May. Dow Jones had asked the judge either to grant a new trial or greatly reduce the remaining award. . . .Tokio Marine & Fire Insurance Co. Ltd. is pitching to investors a $115 million catastrophe bond deal tied to earthquake risk in the Tokyo metropolitan area. The reinsurer is said to be offering investors potential returns of more than four percentage points over the London Interbank Offered Rate, with the 10-year bond's repayment tied to the magnitude, depth and location of a Tokyo-area earthquake. . . .Business owners with coverage in the Texas Windstorm Insurance Assn. will save about $300,000 per year on wind and hail insurance in 1998 because of a 3% rate reduction ordered by the commissioner. . . .C. Timothy Morris has left his position as president and chief executive officer of New York-based insurer GAN North America Inc. to become senior vp and CEO of national accounts with Travelers Property Casualty Corp. . . .William G. Clark, 64, chairman and CEO of Stamford, Conn.-based TIG Reinsurance Co., a unit of TIG Holdings Inc., said he plans to retire next February. A search is under way for a new CEO. . . .Deloitte & Touche and Andersen Worldwide have denied reports that the two have recently held merger discussions. . . .Max Taylor, group chief executive director of Willis Corroon Group P.L.C., was elected last week to a three-year term on the Council of Lloyd's of London. Mr. Taylor's victory clears the way for him to become Lloyd's next chairman. He must win a January election to the office, which at this point is considered a formality.