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Bush signs tax bill with HSA changes
President Bush last week signed into law tax legislation that will significantly boost the appeal of health savings accounts. The HSA provisions, incorporated in the broader tax bill H.R. 6111 that received congressional approval earlier this month during the brief post-election session, will allow significantly larger contributions to HSAs and will ease interaction problems related to flexible spending account grace periods and HSAs.
Cat losses total $15B in 2006
Natural and man-made catastrophes in 2006 caused insured losses of $15 billion and total economic losses of $40 billion, according to preliminary estimates from Swiss Reinsurance Co. To date, only three catastrophe events this year have caused insured losses of more than $1 billion, Swiss Re noted.
Munich Re, SCOR turn to cat bonds
Munich Reinsurance Co. has arranged a cat bond to provide $190 million of California earthquake coverage for risks assumed from units of Switzerland's Zurich Financial Services Group. The issuer of the bond was Lakeside Re Ltd., a special-purpose reinsurance company domiciled in the Cayman Islands. Meanwhile, SCOR S.A. has secured a catastrophe bond from special-purpose vehicle Atlas Reinsurance III that will provide the Paris-based reinsurer with e120 million ($156 million) of reinsurance protection for second and subsequent Europe windstorm or Japan earthquake events from 2007 to 2009.
CSR, ACE settle asbestos dispute
CSR Ltd. has reached a $120 million settlement with Bermuda-based ACE Ltd. in connection with U.S. asbestos claims to end longstanding litigation. CSR began litigation in 1995 in New Jersey federal court against several insurers, seeking indemnity for U.S. asbestos claims, together with other damages and relief, under policies issued to the building products and sugar supplier from about 1978 to 1989. CSR formerly mined asbestos in western Australian and manufactured various products, many of which were exported to the United States. CSR previously settled with other insurers.
Aon buying RMIS vendor Valley Oak Systems
Aon Corp. plans to acquire San Ramon, Calif.-based risk management information system vendor Valley Oak Systems for an undisclosed amount. Valley Oak Systems will join Aon's RiskLab unit as part of its e-Solutions software group. Aon acquired Risk Laboratories L.L.C. in 2004 and phased out its own RMIS product in favor of RiskLab's RiskConsole system. Valley Oak's iVOS system provides claims administration, medical bill review, policy underwriting, case management, billing and event management capabilities.
HCC to restate over options practices
HCC Insurance Holdings Inc. of Houston said it is restating several years of financial results and taking a $30 million pretax charge after a review found HCC improperly accounted for employee stock options from 1997 through 2005 and that the majority of those option grants were retroactively priced. The insurer in a statement noted the findings of that reviewcompleted last monthare what prompted HCC to accept resignations from certain members of management. HCC's founder and former chief executive, Stephen L. Way, resigned last month.
Harbor Point forms retro reinsurer
Harbor Point Ltd. has announced the formation of a new company in Bermuda dedicated to writing retrocessional business. Initial capitalization for the newly formed Class 3 reinsurercalled New Point Re Ltd.is expected to be $250 million, with Harbor Point as a minority investor in the venture. Capital will also be provided by institutional investors, a spokeswoman for Harbor Point said.
Wellington shareholders OK takeover by Catlin
Catlin Group Ltd. said it has received acceptance from shareholders in Wellington Underwriting P.L.C. to allow Catlin to buy the London-based company. Hamilton, Bermuda-based Catlin announced that Lloyd's of London had approved the cessation of Wellington's syndicate 2020, which will allow Catlin to enlarge its syndicate 2003. That syndicate will have capacity of £1.3 billion ($2.6 billion) for 2007.
UnitedHealth ups backdating charges
UnitedHealth Group Inc. last week upped its estimated charges related to improper stock-option granting practices to between $425 million and $1.7 billion, hinging upon the method of accounting used to calculate the charges. The insurer in May had placed the maximum impact stemming from options at no more than $286 million. The company said its new estimates are subject to an accounting review by the Securities and Exchange Commission and may change once the company's previously announced restatement is completed.