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HAMILTON, Bermuda -- A $200 million retrocessional reinsurance deal can be completed faster with capital markets investors and alternative market reinsurers than with traditional reinsurers, says Robert R. Lusardi, executive vp and chief financial officer of EXEL Ltd.
X.L. Mid Ocean Reinsurance Co., EXEL's new reinsurance unit, put out a three-way bid on the coverage and agreed to place a proportion of it with any of the markets that offered coverage within specific price bands.
The reinsurer was formed this month after EXEL merged the former Mid Ocean with its existing reinsurance operations and it wanted to secure the retrocessional coverage as soon as possible due to the looming hurricane season.
Both the capital markets and alternative market reinsurers offered coverage within a few days and took significant portions of the coverage, but the traditional reinsurance market did not respond with the same speed, Mr. Lusardi said.
The coverage is for hurricane and earthquake risks and covers the upper levels of X.L. Mid Ocean's exposures for events that would likely occur in the range of once in 75 to 100 years.
The coverage will be triggered by the actual losses of X.L. Mid Ocean rather than index or industry losses, which have been a feature in several other capital markets deals.
Also, the deal was made as a swap rather than a bond. Bond deals are more liquid, but they must meet time-consuming regulatory requirements, whereas swaps are less liquid because they must be conducted offshore but can be put together quicker, said Clive Tobin, senior vp in the Financial Services Products division of X.L. Insurance Co. Ltd.
RIMS now OSHA stakeholder
NEW YORK -- The Risk & Insurance Management Society Inc. and the federal Occupational Safety and Health Administration now are officially partners.
The risk management professional society and OSHA signed a partnership agreement earlier this month recognizing RIMS as an OSHA "stakeholder." As a stakeholder, RIMS automatically will be notified of proposed workplace safety standards and will get a chance to respond, said Lance Ewing, RIMS external affairs team leader and loss control administrator for the Philadelphia School District.
"We've been trying for a number of years to work with OSHA to remain in the forefront as a stakeholder. We believe that partnering with OSHA will bring RIMS' concerns and objectives to the forefront of OSHA," said Mr. Ewing.
"In addition, OSHA gets an opportunity to pick the brains of RIMS' members relative to how standards would affect the industries," said Mr. Ewing.
Veto threatened on patient bills
WASHINGTON -- President Clinton said last week he would veto Republican-backed patient protection bills unless GOP leaders overhaul the measures to make the measures a "bill of rights" and not a "bill of goods."
The Republican measures fall short in protecting patient rights because, among other things, they do not give patients new legal rights to sue health care plans, do not give patients direct access to all specialists and, in the case of the Senate Republican bill, extend only certain protections to employees in self-funded plans, President Clinton said.
Republican leaders responded by saying their bills would expand access to coverage and that congressional Democrats are holding up action on the legislation.
President Clinton's veto threat decreases the likelihood that legislators and the executive branch can come to an agreement on a patient protection bill. "Your veto threat only makes our job harder," Senate Majority Leader Trent Lott, R-Miss., said in a letter to President Clinton.
The House earlier passed patient protection legislation, while measures in the Senate are stalled because Republicans and Democrats have been unable to reach an agreement on rules to debate and vote on the proposals.
Zurich moves on Holocaust
ZURICH, Switzerland -- Zurich Insurance Group last week became the first insurer to sign a memorandum of understanding with U.S. state insurance regulators to pursue resolving insurance-related claims of Holocaust victims through an International Commission.
Zurich was one of several insurers that had previously signed a more general memorandum of intent to work with the commission, which is committed to resolving its work within two years.
"Despite our limited involvement in the European life insurance market during the World War II era, we agreed to serve as a catalyst in order to help fashion a speedy and just resolution process," Rolf Hueppi, chairman and chief executive officer of the Zurich, Switzerland-based insurer, said in a statement. The company wrote only 0.02% of all life- related policies in Germany during that era, a Zurich spokeswoman said.
Zurich's action came just a day after a $1.25 billion settlement of Jewish groups' bank-related Holocaust claims with the Swiss government and its major banks. However, Zurich faces no bank-related claims from that era, the spokeswoman said.
However, pressure is mounting on insurers with unresolved claims.
For example, Florida and New York have passed legislation imposing sanctions on insurers that do not volunteer to participate with the commission's efforts. California has a similar measure pending.
In addition, individual states, such as California and Florida, have subpoenaed documents from Assicurazioni Generali S.p.A. in Italy. Also, Florida insurance regulators will soon join other states in issuing similar subpoenas to Allianz A.G. of Germany, a Florida Insurance Department spokeswoman said.
Lockheed insured in explosion
CAPE CANAVERAL, Fla. -- Lockheed Martin Corp. will not suffer any losses from the explosion of a U.S. Air Force rocket it manufactured that was carrying a spy satellite.
The $344 million Titan IVA rocket exploded 40 seconds into its launch from Cape Canaveral, Fla. Seconds later, ground controllers detonated the self-destruct mechanism to destroy the rocket and disperse the debris, which fell harmlessly into the Atlantic Ocean.
The spy satellite was owned by the National Reconnaissance Office, a part of the Department of Defense.
A Lockheed Martin spokesman said a consortium of domestic and international insurers, led by United States Aircraft Insurance Group, has insured the company for liability and property.
The federal government assumes any losses above the policy limits, which the company spokesman would not disclose.
The policy does not include the cost of the satellite, a loss the government will absorb. The NRO would not comment on the satellite's value.
The cause of the crash still was under investigation last week.
Workplace fatalities stay stable
WASHINGTON -- The number of fatal work injuries in 1997 remained stable compared with 1996, according to a U.S. Bureau of Labor Statistics census.
Last year's work-related fatality total reached 6,218 -- up six from 1996. While work-related deaths from highway crashes, falls and the operation of machinery rose last year, job-related homicides and deaths as a result of air crashes decreased, according to the report.
Highway crashes were the leading cause of worker fatalities, accounting for 22% of last year's deaths.
The second leading cause of worker fatalities was homicide, accounting for 14% of last year's fatalities. However, homicides were down 7% from 1996 and reached their lowest level in six years. Most of the homicides resulted from shootings, and robbery was the primary motive in instances where the motive could be determined.
Fatal falls to a lower level rose slightly over 1996 and accounted for 10% of the fatality total, while being struck with an object accounted for 9% of last year's deaths.
On average, about 17 workers were fatally injured each day last year, according to the Census of Fatal Occupational Injuries.
Restaurant considering appeal
MIAMI -- Joe's Stone Crab Inc. is consider appealing a federal district court judge's ruling last week ordering the landmark restaurant to pay more than $150,000 to four women and subjecting it to mandatory recruiting and hiring procedures to remedy alleged discrimination.
The Equal Employment Opportunity Commission sued the Miami crab house, alleging its hiring practices from October 1986 through December 1995 discriminated against females applying for food server positions.
In July 1997, U.S. District Court Judge Daniel T.K. Hurley in West Palm Beach, Fla., ruled that Joe's hiring practices violated Title VII of the Civil Rights Act. Last week, Judge Hurley ruled on the damage phase of the suit.
In his 35-page opinion, Judge Hurley said: "Throughout this litigation, Joe's has sought to portray itself as the hapless victim of a powerful government agency gone awry. Yet it is indisputable that it was not until 1991, after the EEOC announced its investigation, that Joe's began to hire female food servers in significant numbers. Until then, virtually every member of the 70-plus staff was male."
From her vacation home in North Carolina, Jo Ann Bass, owner of the 84-year-old restaurant, said: "We still feel that the whole case is unjust and fabricated by the EEOC. It's a manufactured case using us as an example because we're high-profile."
Ms. Bass said she wanted to "hold back" from saying anything specific about the judge's decision "until we've contacted an appellate attorney."
Under Judge Hurley's decision, a court-appointed monitor will be present during Joe's hiring process and prepare a report to the judge through the year 2001. Joe's also was ordered to advertise openings in the local newspapers, adopt a corporate resolution stating it is an equal opportunity employer and provide training to the restaurant's human resources personnel.
The $154,205 awarded to four women who were interviewed for waiting positions but denied employment is not covered by insurance, Ms. Bass said.
The 11th U.S. Circuit Court of Appeals has affirmed an earlier District Court judgment that Lloyd's names can conduct Lloyd's-related disputes only in English courts and under English law. . . .Travelers Property Casualty Corp. has set up a subsidiary in Bermuda to cover punitive damages, loss portfolio transfers, contractual liability, miscellaneous bonds, excess liability and professional liability. Travelers (Bermuda) Ltd. is capitalized at $10 million and has $50 million in capacity. The company will be managed by Mutual Risk Management Ltd. . . .John Berger, president of Morristown, N.J.-based F&G Re and head of the combined St. Paul Re-F&G Re North American Treaty and Specialty operation in New York has resigned, effective today. F&G Re was the reinsurance operation of USF&G Corp. It combined with St. Paul Re in April as a result of The St. Paul Cos.-USF&G merger (BI, Jan. 26). . . .A federal district judge in Philadelphia has sentenced Allen W. Stewart, a former attorney who was convicted of looting two insurance companies, to 15 years in prison. Mr. Stewart was also ordered to pay a $150,000 fine and pay restitution of $60.1 million to policyholders and the state's insurance guarantee fund. Mr. Stewart's appeals of his December 1997 conviction are still pending. . . .William M. Mercer Inc. is purchasing the U.S. compensation consulting practice of KPMG Peat Marwick L.L.P. Terms were not disclosed. Earlier, Watson Wyatt Worldwide purchased Peat Marwick's Northeast benefit consulting business