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BATON ROUGE, La. -- The successor to RISKWeb, the popular but endangered electronic discussion forum for risk managers, could be operational by Wednesday with a new sponsor but under the eye of the original forum's longtime moderator.
Louisiana State University in Baton Rouge, La., is the potential new sponsor of RISKWeb's successor forum, according to sources.
James R. Garven, the educator who created the forum in 1993 and has moderated it since, said he plans to stay on as the new forum's moderator. Mr. Garven's participation is good news for risk managers, who have praised him as an even-handed and unobtrusive monitor of their online discussions. Risk managers were upset last month when Mr. Garven said he likely would not return as moderator.
Mr. Garven, who joined LSU's faculty earlier this year, and a spokesman for RISKWeb owner InsWeb Corp. both declined late last week to identify the potential new sponsor because negotiations with the entity had not been completed. But both said they expected the negotiations would be completed in time to bring the new forum online before InsWeb's planned shutdown of RISKWeb after Wednesday.
RISKWeb operates as both an Internet mailing list that distributes e-mail postings to subscribers as they are made and as a Web site where submissions are archived. Mr. Garven last week estimated there are about 3,400 RISKWeb subscribers worldwide.
InsWeb acquired RISKWeb from Mr. Garven in 1996, the year the company hired the former University of Texas professor as a vp of economic analysis and product researcher. Mr. Garven left InsWeb when he returned to teaching as a professor in LSU's finance department.
Without warning, San Mateo, Calif.-based InsWeb shut down RISKWeb last month. InsWeb explained that the service did not fit into the company's business plan. InsWeb provides online comparison shopping services for buyers of personal lines insurance.
But, after an outpouring of complaints from risk managers, InsWeb reactivated RISKWeb until Sept. 30 (BI, Aug. 24).
Neither Mr. Garven nor the InsWeb spokesman would discuss the nature of the negotiations with the potential new sponsor.
Unclear is whether the successor forum would have access to the RISKWeb discussions that Mr. Garven has archived for subscribers' use. The InsWeb spokesman last month said the company hoped to make the archives available to the forum's new sponsor, if some legal issues concerning privacy and copyrights could be resolved.
Mr. Garven and the InsWeb spokesman also would not discuss whether the new sponsor would have access to the RISKWeb subscription list. The InsWeb spokesman earlier said the company would not make that list available. Under that scenario, current RISKWeb subscribers would have to contact the new sponsor via e-mail and request a subscription to the new forum. If the new sponsor had the list, the sponsor could automatically subscribe RISKWeb users to the new forum.
Mr. Garven said he would post a message on RISKWeb early this week to explain developments.
State loses EMLICO receivership
BOSTON -- Effectively clearing the way for Electric Mutual Liability Insurance Co.'s continued liquidation in Bermuda, a Massachusetts Supreme Court judge has thrown out the state Insurance Division's petition to place EMLICO in receivership.
Supreme Judicial Court Justice John M. Greaney last week dismissed the Massachusetts receivership action, finding that EMLICO "is a lawful Bermuda corporation" and that "both the law and practicality weigh strongly against" allowing a U.S. receivership.
The ruling may signal the end of a marathon controversy that began when EMLICO, a longtime General Electric Co. liability insurer, redomesticated to Bermuda and declared itself insolvent, triggering charges from reinsurers that it had conspired with GE to take advantage of favorable Bermuda liquidation laws.
Massachusetts regulators thought they had worked out a deal last year to act as ancillary receiver to EMLICO's Bermuda liquidators. The Massachusetts high court threw out the deal, though, ruling that state law did not allow EMLICO to move to a foreign country and that -- whatever its status in Bermuda -- it remained a Massachusetts insurer. The Insurance Division then filed its receivership petition.
In his ruling last week, Justice Greaney found that "a corporation can have a lawful existence in two jurisdictions. EMLICO has lawful corporate presences in Bermuda and in Massachusetts even though its redomestication to Bermuda was invalid under Massachusetts law."
EMLICO's assets are also in the control of the Bermuda liquidators and "it follows in my mind that Bermuda has lawful jurisdiction over the liquidation," he wrote.
Justice Greaney cited other reasons for rejecting the petition, including that EMLICO and GE have settled with the reinsurers that challenged the redomestication and that a U.S. receivership would likely conflict with the Bermuda liquidation.
Referring to reinsurers' conspiracy charges against GE and EMLICO, Justice Greaney noted that "there is, to be sure, a seriously disputed question whether EMLICO and General Electric engaged in fraud or other wrongdoing.
"This question, if it is to be resolved at all, is to be answered in other proceedings in different fora," he wrote.
The Insurance Division has not decided whether to appeal to the full Supreme Judicial Court, a department spokesman said.
Vesta's D&O insurer sues
BIRMINGHAM, Ala. -- Vesta Insurance Group Inc.'s recent financial problems have prompted its directors and officers liability insurer to file a lawsuit last week seeking to rescind coverage.
Fairfield, Ohio-based Cincinnati Insurance Co. filed the lawsuit in the U.S. District Court in Birmingham, Ala., where Vesta is based.
Vesta executives said in a statement that the lawsuit, which names all of the individuals covered by the D&O policy as parties, apparently is based on the theory that Vesta's recent restatement of financial information made its earlier application for coverage "inaccurate." Vesta contends, however, that the lawsuit is "completely without merit" and intends to "vigorously contest" what it calls Cincinnati Insurance's "improper actions."
A spokesman for Cincinnati Insurance Co. confirmed the lawsuit is based on Vesta's restatement of its financial results. Cincinnati also insured bonds issued by Vesta and is seeking to rescind coverage for those as well.
Vesta financial problems first came to light in June, when "accounting irregularities" were discovered during an investigation by the Alabama Insurance Department. Subsequently, the company reported that the irregularities could have a sizable impact on prior financial statements, including lowering earnings statements an aggregate of $72.4 million over the past five years (BI, Aug. 24; July 6).
Vesta is a holding company for several property/casualty insurance and reinsurance units.
Kemper, Gulf in joint venture
LONG GROVE, Ill. -- The Kemper Insurance Cos. have entered into a joint venture with Gulf Insurance Group under which a newly formed Kemper underwriting management company will underwrite and administer specialty program business formerly underwritten by Gulf Underwriters Insurance Co.
Through the arrangement, Gulf, part of the Travelers Group, will provide a market for business written through the new underwriting management company. "Some of it will be written on Gulf paper, and some of it will be written on Kemper paper, so (Gulf) will continue to be quite involved in the business," a Kemper spokesman said.
As part of the venture, Kemper also will create a new holding company, along with admitted and non-admitted insurance companies. Vickie F. Kartchner, who was president of Gulf Underwriters, was named president of the new Scottsdale, Ariz.-based Kemper holding company and will be nominated for election as a senior vp of Kemper Insurance Cos. All current employees of Gulf Underwriters have been offered positions with the new Kemper unit.
RightCHOICE, state reach deal
ST. LOUIS -- A final settlement agreement was announced last week among Missouri officials, Blue Cross & Blue Shield of Missouri and the Blues' for-profit publicly traded subsidiary, RightCHOICE Managed Care Inc., in a dispute over RightCHOICE's creation and operation.
The conceptual framework for the agreement, which still must receive court and shareholder approval, was announced in April (BI, April 27). BC/BS of Missouri in 1994 moved all of its managed care operations into newly formed RightCHOICE and then took the company public with an offering of 20%of its stock. State officials argued the new for-profit network owed hundreds of millions of dollars as a public benefit obligation.
Under the settlement agreement, Blue Cross & Blue Shield of Missouri would reorganize and be merged with RightCHOICE Managed Care. A charitable health care foundation would become the owner of 80%of the new RightCHOICE's stock, now owned by BC/BS of Missouri. The foundation would liquidate most of its shares over a period of no longer than five years. The remaining 20%of the new RightCHOICE stock would continue to be owned by RightCHOICE's public shareholders.
The Missouri Department of Insurance and the state attorney general participated in the agreement.
John O'Rourke, chairman, president and chief executive officer of RightCHOICE and president and CEO of BC/BS of Missouri, said at a news conference last week that the agreement, which if approved will resolve all outstanding litigation and regulatory issues with the state, is a "critical milestone" in RightCHOICE's progress toward building its core business and strengthening its leadership position.
Maurice R. Greenberg has been named 1998 Insurance Leader of the Year by The College of Insurance in New York. A benefit dinner is scheduled for Jan. 28 in New York to honor Mr. Greenberg, chairman of American International Group Inc. . . .Henry R. Roberts, former chairman, president and chief executive officer of Connecticut General Corp., died last week at age 82. Mr. Roberts led the life insurer through a period of rapid growth during a career lasting more than three decades. Connecticut General merged with Insurance Co. of North America to form CIGNA Corp. in 1982. . . .Seibels Bruce Group Inc. has named Tom Savage acting president and chief executive officer. He will replace John Weitzel, who is resigning from the Columbia, S.C.-based insurer, the company said in a release. . . .Citicorp and Travelers Group Inc. said the two companies' merger to form Citigroup Inc. is expected to be completed Oct. 8, after gaining approval last week from the Federal Reserve Board. . . .Jerry Choate, 60, chairman and chief executive officer of Northbrook,Ill.-based Allstate Corp., will retire at the end of the year. Edward Liddy, 52, the company's president and chief operating officer, will replace Mr. Choate, who became Allstate's CEO in 1994 and its chairman in 1995. . . .California Gov. Pete Wilson has signed S.B. 1965, a bill that will permit employers to settle retroactive vocational rehabilitation claims (BI, Sept. 14). . . .The Ohio Insurance Department has approved the merger of Nationwide Mutual Insurance Co. with Allied Mutual Insurance Co. of Des Moines, Iowa. The Ohio regulatory approval was the last Nationwide needed to complete its acquisition of Allied.
Errors & omissions
A Sept. 21 headline incorrectly summarized a court ruling in a coverage dispute between a miniblind manufacturer and its insurers. The court rejected the insurers' motion for summary judgment; it did not order them to defend the manufacturer, Jencraft Corp. The story correctly reported that, absent a settlement, the dispute must be resolved at trial. But the story does contain one small reference that inaccurately states the insurers are obliged to defend Jencraft.