SYNOPSIS ALL INDUSTRY CONFERENCE CALL April 14, 2010

The U.S. Department of Labor compared the cost of auto insurance in March 2009 with that of March 2010, and arrived at that figure. One of the biggest cost drivers for the insurance premium increase was the year-to-year growth within this same time frame for hospital services (up 8.6 percent).

USA Today reports auto insurers may ask Toyota to repay them for claims insurers paid as a result of crashes caused by sudden acceleration:

Mark Bunim, an attorney with the mediation firm Closed Case, estimated in this Monday, April 12, USA Today, story that repaying auto insurers’ subrogated claims could cost Toyota between $20 million and $30 million. Motorists involved in Toyota-related accidents could also receive partial or full refunds on any deductibles they paid if their auto insurer is successful in its effort to recoup any losses in this manner, the story explains.

The I.I.I.’s Jeanne Salvatore spoke at length with Charlotte, NC-based AP reporter Ieva Augstums on Tuesday, April 13, about how common the subrogation process is in the insurance industry, a point that was not conveyed clearly in the USA Today article and which prompted the AP to explore whether to run a story on the issue of subrogation.

The I.I.I.’s Michael Barrywas repeatedly asked during a live interview on Tuesday, April 13, whether the owners of recalled Toyota vehicles are going to see an auto insurance premium rate hike. Barry would not get pinned down on the recall’s rate impact, saying that dozens of variables besides make and model go into calculating the price of a policy. FBN was focusing during its Tuesday, April 13, news cycle on Consumer Reports’ (CR) ‘don’t buy’ recommendation for the 2010 Toyota Lexus GX-460, a sport-utility vehicle that CR found vulnerable to roll-overs under certain conditions.  

Wall Street Journal examines darker side of stranger-owned life insurance (STOLI) policies:

In a front page article on Monday, April 12, the Wall Street Journal (subscription required) explored the circumstances surrounding the 2008 death of Germaine Tomlinson, mother-in-law of Stephen Hilbert, a co-founder of Conseco Inc., in what the authorities say was an accidental drowning in her bathtub. It was later revealed that JB Carlson, an Indiana businessman, had a $15 million life insurance policy on Ms. Tomlinson, payable to Carlson’s business. Hilbert’s family has filed a civil lawsuit in federal court in Indianapolis in an effort to gain control of the $15 million policy from Carlson’s company, claiming Carlson had no legitimate right to the policy. The Hilbert family also contends that Carlson, a social companion and business associate of Tomlinson for several years, had no legitimate reason to insure Tomlinson’s life.

More magazine prepping piece on teen driving and auto insurance:

The I.I.I.’s Salvatore spoke with syndicated columnist and NBC Today Show contributor Jean Chatzky on this issue for an upcoming story Chatzky is writing for More, a magazine aimed at women aged 40 and over.

A.M. Best looking at Gulf Coast commercial property insurance market, five years after Hurricane Katrina:

Reporter Chad Hemenway (chad.hemenway@ambest.com) spoke with the I.I.I.’s Bob Hartwig about what has changed since August 2005. Hemenway had a particular interest in profiling the insurance companies who cover the casinos in southern Mississippi.

The Heartland Institute interviews the I.I.I. on epic flooding in Rhode Island:

The I.I.I.’s Barry spoke with D.C.-based Heartland Institute policy advisor Arin Greenwood for a Heartland podcast on the National Flood Insurance Program (what it is, what these policies cover). The piece is pegged to the major flooding that occurred last month in Rhode Island.

A front page story in the Tuesday, April 13, edition of the Dallas Morning News (DMN) talked about how Texas homeowner insurers returned to profitability in 2009, as property claims were nearly half of those lodged as a result of Hurricane Ike in 2008. The DMN article was based on data released on Monday, April 12, by the TDI, which indicated that most home insurers had a solid year, if not a banner one, thanks to the lack of any major weather catastrophes across the state.

A front page story in the Tuesday, April 13, edition of the San Francisco Chronicle reported on the CDI’s Monday, April 12, release of a report alleging that Mercury violated state laws governing auto and homeowners insurance three years ago despite having reached an agreement with state authorities to cease certain business practices.

Sacramento Bee reports Mercury has contributed more than $5 million to boost June 2010 ballot measure:

Mercury Insurance has contributed $5.25 million to the supporters of Proposition 17, a measure that if passed would allow auto insurers to reduce or increase the premiums they charge depending on whether a policyholder has a history of continuous coverage, according to this Tuesday, April 13, Sacramento Bee blog posting.

“After Arnold, don’t we deserve a Republican?” is the tag line of a new ad being aired by California insurance commissioner Steve Poizner, who is challenging Meg Whitman in the California GOP gubernatorial primary. The advertisement isn’t sitting well with the governor’s press secretary, according to this Tuesday, April 13, Sacramento Bee article. The primary election is being held on Tuesday, June 8.

Orlando Sentinel columnist focuses on undercapitalization of Florida’s property insurance market:

“Of 70 Florida-based insurers, 50 [of them] lost money last year,” wrote Mike Thomas, in this Sunday, April 11, Orlando Sentinel column. “Several have failed despite the fact we haven’t had any hurricanes. They can’t even pay garden-variety claims. Can you imagine how fast this house of cards collapses when a big storm hits? And then when another storm hits after that?”  

Insure.com says Louisiana ($2,510 a year, per vehicle) is the most expensive state in which to insure a car, and Maine ($902 a year, per vehicle) is the least expensive. Insure.com issued a news release on Monday, April 12, with its state-by-state analysis, and the story got picked up in Jennifer Saranow Schultz, who writes the New York Times’ Bucks Blog, the same day.

New York State Superintendent of Insurance James Wrynn and Queens County District Attorney Richard Brown are scheduled to address this summit, which is co-sponsored by the New York Insurance Association and the National Insurance Crime Bureau and is being held at the La Guardia Marriott, East Elmhurst, New York. The full agenda can be found here.

Since the call, Bloomberg’s Erik Holm announced that he has joined Dow Jones Newswires as a New York City-based reporter, and will be contributing regularly to The Wall Street Journal.  In an email message, Holm said he’ll still be covering property/casualty and life insurers, and that his first day at Dow Jones was Monday, April 19. His new email address is Erik.Holm@dowjones.com, and the phone number is 212-416-2892.  It appears as though Holm will be filling the position vacated by the departure of Lavonne Kuykendall.