JANUARY

Superfund reform legislation is introduced in the Senate that would provide some liability relief for small businesses, municipalities and transporters of waste, though the proposal would not repeal retroactive liability. The measure, S. 8, also would create a new system for allocating liability for multiparty waste sites. It is still pending.

The Occupational Safety and Health Administration and the National Institute for Occupational Safety and Health sponsor a forum for businesses, labor unions, researchers and others to share information about ergonomics programs and practices.

FEBRUARY

California insurance regulators seize control of Golden Eagle Insurance Co., citing inadequate reserves and unsecured loans made to its chairman, John Mabee. The department subsequently accepted a bid from American International Group Inc. to take over Golden Eagle. That decision later was overturned by a state court judge, who, after an acrimonious battle for control of the company, instead awarded it to Liberty Mutual Insurance Co.

MARCH

Chubb Corp. sells its life insurance operations for $875 million to focus on property/casualty operations.

CIGNA Corp. vows to appeal a Pennsylvania appellate court ruling that vacates the state insurance commissioner's approval of its controversial reorganization. The ruling also ordered new, trial-like hearings to be held in the case.

New Hampshire regulators place The Home Insurance Co. under formal state supervision after the insurer fell nearly $552 million short of its risk-based capital requirements.

France adopts a $3.46 billion rescue package for insurer Groupe des Assurances Nationales, recapitalizing the company after writing off real estate losses and poor underwriting results. The package is expected to pave the way for the government to privatize GAN.

Broker Marsh & McLennan Cos. Inc. acquires Johnson & Higgins for $1.8 billion. The deal assures M&M's lead over competitor Aon Group Inc. and is a windfall for the directors of J&H, many of whom will be made multimillionaires.

Lloyd's of London will appeal a 9th U.S. Circuit Court of Appeals ruling that overturned a lower court decision and allows U.S. members to sue Lloyd's in U.S. courts. The court, which hears the appeal en banc in October, has yet to rule. In June, the U.S. Supreme Court declined to hear a conflicting 4th Circuit case that held U.S. members must bring suit in the United Kingdom.

Liggett Group Inc. breaks ranks with the other tobacco companies and reaches a proposed settlement with 22 state attorneys general. In the settlement, Liggett admitted that cigarettes are harmful and addictive and that it has marketed to teenagers. Those admissions are expected to harm other tobacco companies' efforts to defend themselves from lawsuits.

Property/casualty insurers reported 1996 profits were $24.1 billion, up 17% over 1995 earnings. Underwriting losses were 5.4% smaller, while consolidated surplus gained 11.5% to $256.5 billion.

APRIL

Bermuda catastrophe reinsurer Partner Re Ltd. makes a $950 million acquisition of French reinsurer SAFR. The deal, centered around the minority shares Swiss Reinsurance Co. holds in both companies, will diversify Partner Re and greatly expand its geographic reach.

The soft market has forced a risk retention group, American Justice Insurance Reciprocal, to shut its doors and shift its book of business to CNA Insurance Cos. Later in the month, members of a Tennessee RRG, Clinic Mutual Insurance Co., opted to place the facility in runoff and join a newly formed risk purchasing group. Clinic Mutual's decision was prompted by changes in statutory liability for its members, as well as the soft market.

Merger mania among the world's largest brokers heats up, with Aon Group Inc.'s announcement that it will buy Minet Group. The surprise deal takes away a target of broker Marsh & McLennan, which had been in talks to acquire Minet since January.

Representatives of the major tobacco companies begin talks with state attorneys general on a proposed global settlement of tobacco litigation. The tobacco industry in June agrees to a $368.5 billion settlement with the states that would protect the companies from future class-action litigation. The settlement ultimately must be approved by Congress.

MAY

Workers compensation insurers and some employer groups are challenging a California regulator's move to alter permanent disability ratings, contending the official lacked the authority and oversight to make such changes. Workers comp payers contend the changes will raise their costs.

Bermuda's excess liability insurers continue to diversify with X.L. Insurance Co. Ltd.'s $637 million acquisition of the holding company of property catastrophe reinsurer Global Capital Reinsurance Ltd. The move follows competitor ACE Ltd's 1996 purchase of cat reinsurer Tempest Re.

The 5th U.S. Circuit Court of Appeals strikes down a Louisiana law that set numerous standards for risk retention groups. The ruling affirms a lower court ruling that held the federal Risk Retention Act pre-empted the Louisiana state law.

A panel of the National Assn. of Insurance Commissioners is considering broad deregulation of rates, forms and market access for "industrial insureds," or large commercial policyholders. The NAIC group throughout the year continues to draft its position on deregulation and unveils it for public comment in December.

JUNE

Lloyd's of London announces record profits for the 1994 underwriting year, driven significantly by the absence of huge additions to reserves, which characterized the market for several years prior to the creation of the market's runoff reinsurer, Equitas Ltd.

Two proposed catastrophe product liability facilities for pharmaceutical companies are shuttered, failing to attract interest in a soft market flush with capacity. A third such facility collapses later in the year.

California ergonomics standards win final approval from regulators, setting the stage for July 1 implementation of the nation's first mandated ergonomics standards. California employers, however, are largely sanguine about the new rules, noting many already are in compliance via voluntarily work site improvements.

SAFECO Corp. bids $2.8 billion to acquire American States Financial Corp. from Lincoln National Corp.

Colorado State University hurricane forecasters predict 11 named storms in 1997, including three major hurricanes, which would continue several years of hefty windstorm losses. However, underwriters and U.S. risk managers ultimately escape 1997's hurricane season relatively unscathed, thanks to El Nino's hurricane-dampening effects in the Atlantic.

The United Services Automobile Assn. creates a special purpose reinsurer to issue $477 million in East Coast hurricane catastrophe bonds, which will provide USAA $400 million in excess coverage in the event of a cat loss. Subsequently, Swiss Re and Tokio Fire & Marine issue cat bonds for quake risks.

In a sharp blow to a key litigation strategy for businesses, the U.S. Supreme Court rejects a $1.3 billion class-action settlement of asbestos claims. The 6-2 majority in Amchem Products Inc. vs. Windsor et al. held that the members formed for the class were too diverse and that many potential class members would not even be aware of their eligibility though they would be barred by the pact from suing. Citing the decision, a federal judge in August rejects a proposed class action settlement of tobacco litigation against Liggett Group Inc.

JULY

A report listing insurance companies that provided coverage of Nazi death camps during the Holocaust has prompted at least one company to cancel coverage placed with Allianz Insurance Co. Holocaust survivors also are suing Allianz and other insurers in U.S. and European courts over their alleged failure to honor life insurance policies of Jews and other victims of Nazi persecution.

U.S. District Judge Sam C. Pointer Jr. convenes a panel of four physicians to hear and assess scientific evidence on whether silicone gel breast implants cause illness or disease. Judge Pointer has been named to hear all federal breast implant product liability cases against Dow Corning and Dow Chemical.

AUGUST

In a major combination of insurance and financial services, Winterthur Insurance Co. and Credit Suisse Group agree to a merger designed to provide each other's clients with one-stop shopping.

Central Sprinkler Corp. comes under scrutiny after media reports that the company's Omega fire sprinklers failed to operate during tests and actual fires. Omega responds that it has improved the Omega model by no longer using rubber O-rings. In November, however, the company announces it inadvertently made 20,000 more sprinklers with the potentially flawed design.

Hudson Foods Co. is uninsured for the costs of a product recall of more than 1 million pounds of ground beef after some patties in Colorado were found to be tainted with E. coli bacteria. The government later expands the recall to 25 million pounds.

SEPTEMBER

Dow Corning Corp. issues a new settlement offer to silicone breast implant claimants that would pay them $2.4 billion, or $400 million more than its offer before entering bankruptcy protection. The company's offer also would require a single causation trial in attempt to put to rest claims that silicone implants cause injury.

Ohio labor unions and trial attorneys obtain 400,000 signatures to put a measure on the ballot that would repeal workers comp reforms enacted early in the year. In the Nov. 4 general elections, the ballot measure is defeated, erasing the pro-employer reforms.

OCTOBER

Lloyd's of London wins its first marketwide ratings from Standard & Poor's Corp. and A.M. Best Co. Lloyd's sought the ratings to provide a clearer basis of comparison with other global insurers.

A bipartisan congressional group unveils a new Occupational Safety and Health Administration reform bill. A cornerstone of the proposed measure would allow employers to obtain OSHA compliance evaluations from independent third- party safety auditors. Labor Secretary Alexis Herman later vows to push for a veto of the measure.

A J&H Marsh & McLennan memo outlining a new strategy to place certain insurance business through six regional offices rather than local offices nationwide is sparking concern among risk managers who see the move as evidence of the world's largest broker throwing its clout around at their expense.

A discussion draft of proposed product liability reforms wins the backing of the Clinton administration, which was a key obstacle to reform in the previous Congress. The measure, however, is considerably watered down from other reform bills.

The Year 2000 computer problem becomes more urgent for risk managers and insurers as time is running out for companies to begin conversion projects. Several insurers have unveiled products aimed at covering losses from the exposure of companies or their suppliers, though the industry also drafts policy exclusions.

Zurich Insurance Co. proposes a merger with the financial services unit of B.A.T Industries P.L.C., which would create one of the world's largest insurance and asset management companies. The deal is not expected to be completed before late 1998, however, because of the regulatory approvals required.

The collapse of financial markets in Southeast Asia creates potential losses for investors as well as export credit risks for companies doing business in the region. Political risk insurers expect growing demand for coverage to protect exporters from the shaky Asian business climate.

NOVEMBER

A proposal to dust off and reform the Resource Conservation and Recovery Act of 1976 -- a predecessor to Superfund -- is announced in Con-gress in the wake of a GAO report recommending a few targeted regulatory reforms to save more than $1 billion annually in cleanup costs.

After three syndicate insolvencies from late 1996-early 1997 and a sharp decline in premium volume, the Illinois Insurance Exchange gets a shot in the arm with new syndicates and high-profile directors. Kemper Insurance Cos. also forms a new syndicate to enable the company to write surplus lines business. The exchange also renames itself INEX to signal the new direction.

DECEMBER

Trygg-Hansa SPP Group has transferred its shares in troubled Home Holdings Inc. to a bank trust as the first step in a plan to restructure Home Holdings and its debt.

Retired directors of Johnson & Higgins file suit alleging that active directors of the company fraudulently structured the sale of the broker to Marsh & McLennan Cos. Inc. The retirees allege the deal was improperly structured to enrich active directors and without prior approval from the retired partners.

In a case watched closely by business, the Supreme Court ruled in General Electric vs. Joiner that trial court judges -- and not appeals court judges -- should determine whether expert testimony meets scientific standards for admissibility. Businesses viewed the decision as a victory in their efforts to keep so-called "junk science" out of the courtroom.