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Six-month cat losses total $3.43 billion: PCS
Catastrophes caused an estimated $3.43 billion in insured property damage in the United States during that first half of the year, according to the Insurance Services Office Inc.'s Property Claim Services unit. That includes $2.18 billion in estimated losses during the year's second quarter, PCS said. Six catastrophes--defined as events that cause at least $25 million in insured property losses and that affect a significant number of policyholders and insurers--occurred during the second quarter, PCS noted.
Ex-Brightpoint exec fined over finite deal
A New York federal court ordered Brightpoint Inc.'s former director of risk management, Timothy Harcharik, to pay $50,000 in fines for his role in a fraudulent finite risk deal struck in 1998 between Brightpoint and American International Group Inc., the Securities and Exchange Commission said. The final judgment entered against Mr. Harcharik follows a four-day trial in May that found him liable of aiding and abetting fraud in the Brightpoint-AIG deal. The jury did not find Mr. Harcharik liable for two of five total charges brought against him by the SEC. The civil case was the first finite risk-related securities case to go to trial. AIG in 2003 paid $10 million to settle charges by the SEC over the 1998 finite transaction with Brightpoint, which the SEC charged did not involve any actual risk transfer.
Retiree class action against Caterpillar OK'd
A judge for the U.S. District Court for the Middle District of Tennessee has granted class action status to a lawsuit filed against Caterpillar Inc. by retirees and surviving spouses of retirees who say the manufacturing giant reneged on its promise of free lifetime retiree health insurance benefits. The plaintiffs allege Caterpillar promised lifetime, no-cost health benefits under union contracts but began charging them for a portion of their medical care in 2004 without their consent in violation of the Labor Management Relations Act and the Employee Retirement Income Security Act. The plaintiffs sued on behalf of a class of all retirees and surviving spouses of retirees who were represented by the union and who retired on or after Jan. 1, 1992, and before March 16, 1998.
Hurricane center head reassigned amid protests
The head of the National Hurricane Center has been reassigned in the wake of employee protests. Bill Proenza, who had served as NHC director in Miami for less than a year, had held that if an aging weather satellite was not replaced, NHC employees would face serious difficulties forecasting hurricanes. A group of NHC employees disagreed and called for his resignation, saying that he overstated the problem. Mr. Proenza was reassigned to unspecified other duties last week, and Deputy Director Ed Rappaport assumed the director's duties on a temporary basis.
Farmers arranges notes for future cat losses
An affiliate of Farmers Insurance Group has the right to issue $500 million in subordinated notes to cover U.S. catastrophe losses over the next five years, under a facility arranged by Swiss Re Capital Markets involving international banks. Under the transaction, completed last week after its syndication to international banks, if the Farmers Insurance Group suffers windstorm losses in excess of $1.5 billion, it has the right to issue 10-year subordinated loan notes to major institutions to restore its capital base, according to a statement issued by Farmers, a subsidiary of Zurich Financial Services Group. The subordinated loan notes would be issued by Farmers Insurance Exchange.
N.Y. orders 20.5% cut in workers comp rates
New York employers will save about $1 billion in workers compensation insurance premiums during the upcoming fiscal year as a result of reforms to the workers comp statute enacted earlier this year, according to the New York State Department of Insurance. Based on an analysis of the reforms and market trends, New York State Insurance Superintendent Eric Dinallo ordered a 20.5% rate decrease for the fiscal year beginning July 15. The lower rate is possible due mainly to the passage of the 2007 Workers' Compensation Reform Act, New York officials said. The legislation included a number of changes, including setting a limit on the number of years that permanent partial disability claimants could receive benefits and eliminating the state's Second Injury Fund, which was financed through assessments insurers passed on to employers.
Investment bank Hales buys WFG Capital
Hales & Co. Inc., an investment banking firm that specializes in the insurance industry, has acquired WFG Capital Advisors L.P., a financial advisory firm that specializes in mergers and acquisitions and strategic consulting services for middle-market clients in the insurance industry. Terms of the deal were not disclosed. New York- based Hales provides M&A and corporate finance advice to insurance agents, brokers, insurance companies and related financial services businesses. The firm has completed more than $1 billion of transactions in the insurance industry since 2005.
Hawaii lawmakers fail to override comp vetoes
The Hawaii Legislature last week failed to override vetoes by Gov. Linda Lingle of two workers compensation bills that would have guaranteed uninterrupted medical treatment for injured workers and restricted the rulemaking authority of Hawaii's director of labor and industrial relations. Among other things, Senate Bill 1060 would have limited an employer's power to terminate benefits and authorized the recovery of attorney's fees and costs by the injured worker. House Bill 855 would have required uninterrupted medical care for injured employees even if the worker's employer denied further treatment. A decision by the state's director of labor and industrial relations would have been required to settle disputes.
Job-based health cover declining in Calif.: Study
Although the overall percentage of uninsured California adults and children dropped slightly from 21.9% in 2001 to 20.2% in 2005, the proportion with employment-based coverage dropped from 57% to 56.2%, a UCLA study found. The improvement in the state's uninsured rate was attributed to expanded enrollment of children in public insurance programs, according to a report issued by the University of California at Los Angeles Center for Health Policy Research.
DB pension plans losing ground: Survey
More than a quarter of employers have frozen their largest pension plan during the previous two years, according to survey. The survey of 162 employers conducted by the Employee Benefit Research Institute and Mercer Human Resource Consulting found that 27.7% of respondents either have closed off their largest defined benefit plan to new employees or have completely frozen the plan during the last two years. The survey notes that pension phaseouts are likely to continue, with just over 16% of respondents expecting to freeze a plan within the next two years.
Standard & Poor's Corp. has removed energy industry mutual Oil Insurance Ltd. from review and affirmed its A- financial strength rating. The outlook on OIL continues to be negative, though, New York-based S&P said in a statement, due to uncertainty surrounding its long-term strategy and the stability of its membership base, among other factors....Standard & Poor's Corp. has raised its insurer financial strength ratings on Munich, Germany-based Allianz S.E. and various core operating entities to AA from AA-.