SYNOPSIS ALL INDUSTRY CONFERENCE CALL April 28, 2010

Since the call, the federal government has dramatically expanded its response to the oil spill that emerged in the Gulf of Mexico, off the coast of Louisiana, after the Deepwater Horizon rig caught fire on Wednesday, April 21, according to as front-page story in the Friday, April 30, edition of the Wall Street Journal (subscription required). Governor Bobby Jindal’s Thursday, April 29, letters to U.S. Defense Secretary Robert Gates and U.S. Homeland Security Secretary Janet Napolitano are here.

The I.I.I.’s review notes that “offshore oil rigs are among the most difficult and complex commercial risks to insure, subject to a unique set of environmental conditions because of their location at sea and their constant exposure to catastrophes and loss.” The I.I.I.’s Terms + Condition blogger, Claire Wilkinson, has been tracking developments in the Gulf of Mexico closely.

There was national media coverage of a path of tornadoes that began in eastern Louisiana early on Saturday, April 24, and then swept through the central part of Mississippi over a period of about three hours, covering 200-plus miles before diminishing in western Alabama. The I.I.I. posted on Sunday, April 25, a news release on coverage and claims-filing issues. In addition, Allstate established mobile claims units in Yazoo City, MS and Albertville, AL, according to this Monday, April 26 news release.

WSJ reporterMP McQueen’s ‘Is Travel Insurance Worth the Cost?’ opened with an anecdote about how the I.I.I.’s Hartwig was stranded in England for a few days earlier this month, like thousands of others, because air travel across the Atlantic Ocean was disrupted due to the eruption of a volcano in Iceland. The piece appeared in the WSJ’s Weekend Journal on Saturday, April 24 (subscription required).

Russ Dubisky is the new executive director of the South Carolina Insurance News Service (SCINS); he started in his new job in Columbia, South Carolina on Monday, April 26 (email: russd@scinsnews.com). He succeeds Allison Dean Love, who had been the SCINS’s executive director for 14 years before joining the Institute for Business & Home Safety (IBHS) last month as an external relations consultant. Dubisky worked previously as a public affairs specialist with State Farm in Raleigh, North Carolina. Before that, he served as deputy director of the Insurance Federation of North Carolina.

Philadelphia Inquirer publishes feature on Rutgers law professor’s insurance book:

Professor Jay Feinman’s book, Delay, Deny, Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It, was profiled in the Sunday, April 25, edition of the Philadelphia Inquirer. The author teaches at the Rutgers Camden, New Jersey campus, which is situated within the Philadelphia media market.

Wall Street Journal reports Chinese drywall manufacturer is negotiating with U.S. home builders to settle claims:

China’s Knauf Plasterboard Tianjin Co. (KPT) is holding talks with the U.S. builders named in dozens of lawsuits filed by U.S. homeowners who claim that drywall imported from China is releasing sulfurous odors and causing health problems, according to this Wednesday, April 28, article in the Wall Street Journal (subscription required). Builders are seeking to cover the cost of replacing the drywall by filing lawsuits against the manufacturers, and others. Kerry Miller, a partner at the law firm Frilot, LLC in New Orleans, which is representing KPT, said that a few tentative agreements could be completed soon.

The committee approved the measure, 40-25, on a mostly party-line vote on Tuesday, April 27. Representative Gene Taylor (D-Mississippi), one of the lead sponsors of the legislation, which would allow the National Flood Insurance Program (NFIP) to sell wind coverage policies, posted to his Congressional Web site the Alabama Register’s Wednesday, April 28, article on the committee’s action. Most stories about the U.S. House’s vote on HR 1246 noted that a comparable bill was defeated by a margin of 74-19 when it came before the U.S. Senate.

Representative Maxine Waters (D-California) is one of the act’s primary sponsors. If enacted it would reauthorize the NFIP for five years, and raise the flood insurance program’s policy limits, among other things. Rep. Waters’ Congressional Web site offers additional details on the committee’s Wednesday, April 27, action.

Homeowners’ Defense Act (HR 2555) also receives affirmative vote from same U.S. House committee:

By a margin of 39-26, U.S. House Resolution 2555 won the support of the Financial Services committee in a vote taken this week. Representative Ronald Klein (D-Florida), a key backer of the act, issued a formal statement on the latest developments.

John Rollins, former chief actuary for Citizens Property Insurance Corp., had an op-ed published in the Tuesday, April 27, Lakeland (FL) Ledger on the need for policymakers to restore Citizens’ finances (increase premium rates, allow Citizens to purchase more reinsurance, and decrease the size of its total book of business). The op-ed had appeared previously in the Gainesville Sun.

Nirvi Shah is replacing Beatrice Garcia, who left the Herald for another position outside of the newspaper industry. Shah, who has been with the paper since September 2006, can be reached at 954-527-2828, or via email at nshah@miamiherald.com.The I.I.I. has been working with Shah to explain the common mistakes people make regarding property insurance, a theme that will be explored as part of an upcoming hurricane preparedness article.

The Florida Republican made it official on Thursday, April 29, in St. Petersburg, FL, his hometown. WSJ editorial writer Kimberley Strassel mentioned the property insurance issue when theorizing in her Friday, April 23, Potomac Watch column why the governor was trailing so badly among the state’s registered Republicans in his bid for the U.S. Senate: “Mr. Crist is best-known for launching a vicious campaign against property insurers in the wake of Hurricane Katrina. Mr. [Marco] Rubio pushed back, though it was unpopular. Now that the governor has succeeded in driving that industry out of his state, things look different.”

The I.I.I.’s Jeanne Salvatore had a live interview with Philadelphia’s Fox affiliate to discuss the auto insurance repercussions of the Philadelphia police department’s announcement that it would, effective Monday, May 3, no longer respond automatically to vehicle collisions, if both cars could be safely driven from the scene. The changes in how to report auto accidents to police are detailed in this Tuesday, April 27, release. Also on Tuesday, April 27, the I.I.I.’sLoretta Worters taped an interview on Tuesday, April 27, to be aired at a later date, with Philadelphia’s CBS affiliate. The station’s consumer reporter, Jim Donovan, is looking into the plight of a driver who dropped his collision coverage, and then had his car damaged by another vehicle while it was being repaired at a local Pep Boys outlet.

Wind gusts of more than 100 miles per hour downed power lines in northern Nevada on Tuesday, April 27, causing outages for thousands of Reno residents and wreaking havoc with travel, according to this same-day Reno Gazette-Journal story. About 5,000 homes and businesses went without electricity for hours in Reno, where the wind ripped shingles off roofs, toppled fences, blew a school bus door off its hinges and uprooted hundreds of trees, including a 70-foot-tall pine, published accounts of the severe weather noted. More than a dozen flights were canceled at Reno-Tahoe International Airport, too, where sustained winds up to 63 mph were reported. 

The New OrleansTimes-Picayune posted on Friday, April 23, this blog item on the Louisiana state Senate Insurance Committee’s approval of Senate Bill 246, which would prohibit insurance companies from assessing a penalty on policyholders who cancel their insurance coverage before the policy’s expiration date. The bill’s primary sponsor is Louisiana state Senator Joe McPherson (D-Woodworth), and also requires that the insurer rebate to the customer a pro-rated share of the premium within 30 days of a policyholder’s cancellation.

Atlanta Journal-Constitution reports on insurance industry opposition to insolvency pool bill:

In response to the demise last year of Southeastern U.S. Insurance Company (SEUS), a worker’s compensation insurer which for years operated as a captive, the Georgia state Senate passed a measure to allow employers who purchased SEUS policies when it was a captive insurer to buy into the state’s insurance insolvency pool, according to this Wednesday, April 21, Atlanta Journal-Constitution story. Georgia state Representative Carl Rogers’ (R-Gainesville) bill lets employers with less than $25 million in net assets buy into the pool coverage by paying $20,000 per claim. Employers with more than $25 million in net assets would be required to pay $100,000 per claim under the Senate legislation. The Georgia House, which passed a comparable bill last month, set the buy-in fees at $5,000 and $20,000 per claim, respectively. The proposal now goes back to the Georgia House to be reconciled with the Senate’s version before its submission to Governor Sonny Perdue, according to the AJC’s article.

If Governor Riley signs House Bill 306 into law, Alabama will become the 10^th state to prohibit municipalities from charging its residents accident response fees. Similar legislation is already in effect in Arkansas, Florida, Georgia, Indiana, Louisiana, Missouri, Oklahoma, Pennsylvania and Tennessee, according to this Friday, April 23, news release issued by Property Casualty Insurers Association of America.