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Merck withdraws Vioxx over health risks

Merck & Co. has withdrawn its arthritis and acute pain drug Vioxx from the market, after data from a three-year clinical trial showed an increased risk of heart attack and stroke for patients taking the drug for more than 18 months. A spokeswoman for the Whitehouse, N.J.-based drug company said it likely has coverage for any securities-related litigation stemming from the move, though she did not know whether the company would be covered for other costs related to the recall, including lost revenues. Several insurers and pharmacy benefit managers said they have suspended the distribution of Vioxx through their pharmacy networks.

Delta cutting benefits to avoid bankruptcy

Delta Air Lines Inc. will require employees to pay more for their health benefits and will eliminate health insurance subsidies for future retirees as part of efforts to avoid bankruptcy. The Atlanta-based air carrier announced that it will also offer early retirement buyouts, cut some employees' pay and furlough as many as 7,000 workers. The airline has not specified how much more employees would have to contribute toward their health benefit costs. The retirement subsidy cut for health care coverage at age 65 and after will be effective for employees retiring after Jan. 1, 2006.

New insurer to write California comp business

The California Department of Insurance has licensed CompWest Insurance Co. to write workers compensation coverage in the state. The San Francisco-based insurer said in a statement that it will work through independent regional brokers to serve California's middle market. CompWest is headed by Chief Executive Officer William J. Mudge, who formerly was CEO of Golden Eagle Insurance Corp.

Court orders MIIX into rehabilitation

The Superior Court of New Jersey has ordered MIIX Insurance Co. into rehabilitation over the objections of parent company MIIX Group Inc. The New Jersey Department of Insurance, which requested the move, will now have control over the business and property of MIIX Insurance, a medical malpractice liability insurer that has been in runoff since May 2002. Officials of MIIX Group could not be reached for comment.

Endurance buys XL Re surety book

Endurance Reinsurance Corp. of America has acquired the renewal rights to a $50 million book of surety reinsurance business from an XL Capital Ltd. subsidiary, along with the XL unit's surety underwriting team. Endurance Re, a U.S. unit of Endurance Specialty Holdings Ltd. of Bermuda, acquired the rights to the business-mainly contractor and specialty surety risks-from XL Reinsurance America Inc. Endurance Re will pay XLRA a commission as it renews the surety risks and will assist XLRA in managing the in-force surety portfolio.

PBM disclosure bill vetoed in California

California Gov. Arnold Schwarzenegger has vetoed A.B. 1960, which would have required greater transparency from pharmacy benefit managers to disclose information about revenues, including rebates, and how formulary decisions are made. In his veto letter, the governor said he believed the measure would increase prescription drug costs to health plans and the state Medicaid system.

Justice Department investigating AIG unit

The U.S. Department of Justice is investigating an American International Group Inc. unit for possible violations of securities laws, the New York-based insurer said. The Department of Justice investigation into AIG Financial Products Corp. follows a similar investigation by the Securities and Exchange Commission. The SEC earlier said it may bring a civil action against AIG Financial Products and its parent for violations of federal securities laws, following an investigation into transactions between the AIG unit and PNC Financial Services Group Inc., which involved the transfer of $762 million of volatile, troubled or underperforming loans and venture capital assets to three special-purpose entities in 2001. AIG said that "any action by either the SEC or Justice Department would be unwarranted."

CIAB, broker network forming partnership

The Council of Insurance Agents & Brokers is teaming with the Worldwide Broker Network to form an expanded global network. The move will give members of the Council and WBN and their clients access to greater capacity and resources for global business. The two-year joint operating agreement, which will be administered by the Council, begins Jan. 1, 2005. Both the Council and the London-based WBN expect the partnership to spur an expansion of their global network into Asia, Central and South America, Africa, and other key insurance markets around the world.

Briefly noted

Brian Duperreault, chairman of Hamilton, Bermuda-based ACE Ltd. has been named the 2004 Insurance Leader of the Year by the School of Risk Management at the Peter J. Tobin College of Business of St. John's University in New York. Mr. Duperreault will be presented with the award at a dinner in New York on Jan. 27, 2005....The Hartford Financial Services Group Inc. has warned that its third-quarter earnings will be "significantly lower than expected" because of hurricane losses and a reserve boost, which together will total nearly $250 million. The reserve boost, a $49 million increase in environmental reserves, reflects changes in individual policyholders' exposures, the insurer said....Reinsurance intermediary Cooper Gay Holdings Ltd. has opened a North American treaty division based in New York. Executive Vp Nick Newman and Senior Vp Judith Benson, who previously were executives at John P. Woods Co. Inc., will lead the new division.