To recap the issues raised during Wednesday’s conference call, here are some of the key media stories, and the messages we’re conveying.
If there is a subject you would like to see addressed on Wednesday, August 12, please email Mike Barry at Michaelb@iii.org.
Consumer Reports focuses on homeowners insurance and credit:
The September 2009 issue (see attached) looks at homeowners insurance coverages and a survey of its readers conducted by the Consumer Reports National Research Center about their homeowners insurance claims filed over the past few years. In addition to the feature story, there was a Viewpoint piece (see attached) by Jim Guest, president of Consumer Reports. The article, “Another Misuse of your Credit Report,” talked about the industry’s use of credit-based insurance scores. An I.I.I. rebuttal was prepared and sent (see attached) to Guest. National Underwriter’s Mark Ruquet contacted the I.I.I. for their reaction to the story, survey and online video. Ruquet’s story (subscription required) was filed
August 5. Jeanne Salvatore will also be arranging a meeting with the senior editorial staff of Consumer Reports to work toward better coverage of the industry in the future.
Transportation Secretary announces distracted driving summit:
Transportation Secretary Ray LaHood’s announcement on August 4 that the department would hold a summit on the problem of distracted driving was reported by Matt Richtel in The New York Times. Tentatively scheduled for September, the meeting is expected to include safety experts, academics, elected officials, the police and others. The group will discuss legal and policy changes addressing the problem of driver distraction.
“Cash for clunkers” program likely to get additional funding:
New York Times’ Matthew Wald reported that Transportation Secretary LaHood and Senate Majority Leader Henry Reid said they were confident the Senate would agree to extend the “cash for clunkers” program by voting in favor of an additional $2 billion in funding, a measure approved by the House at the end of July. The Senate is scheduled to recess on August 7 so a consensus is required in order for a vote to be held before the recess. Any amendment would prevent the program from being revived until after Labor Day. Note: cash for clunkers program was extended into law on Friday, August 7.
Vioxx reaches $80 million settlement:
Chicago Tribune reported that health insurers, unions and other private groups that paid for prescriptions for Vioxx have reached an $80 million settlement agreement with Merck & Co., manufacturer of the painkiller which was withdrawn from the market after being linked to heart attacks and strokes. These third-part payers had filed 190 claims against Merck saying that they would not have paid for the prescriptions if they had known about the cardiovascular risks. In 2007 Merck agreed to pay $4.85 billion to cover the claims of approximately 50,000 plaintiffs in litigation related to Vioxx. Merck could still be held liable in hundreds of other Vioxx lawsuits, including those of patients who were not eligible for the $4.85 billion settlement or who chose not to participate.
CNN Money.com looks at cost of homeowners and auto insurance due to weather-related losses:
The article, written by Lisa Gibbs, noted that in spite of the poor economy, insurers still made profits on their investments last year, although only about half of what they made in 2007. However, underwriting losses skyrocketed, with insurers paying out $21.2 billion more in claims than they took in premiums. I.I.I.’s Bob Hartwig was quoted in the piece saying “Insurers went into the financial crisis better capitalized than they’d ever been.” In the future, Hartwig said insurers will need to refocus their strategy on earning underwriting profits, like the period after the Great Depression, when insurers felt they could no longer rely on investment markets alone to make profits.
Associated Press prepping for story on slumping housing prices and renting a home:
Jana Elphinstone is looking at the insurance implications of renting a home amid slumping housing prices, how more homeowners are electing to rent their home rather than take a loss on a sale and the insurance implications of renting out a house. Elphinstone can be reached at 212-621-1693; jelphinstone@ap.org.
CNBC’s Sharon Epperson working on story about having the right amount of insurance:
Ms Epperson covers personal finance and energy for CNBC, writes a column for USA Weekend and also answers viewer questions for NBC’s Today Show. She spoke with Dr. Steve Weisbart and Jeanne Salvatore on having the proper coverage and how to save money on auto, home and life insurance. She can be reached at Sharon.Epperson@nbcuni.com
Wall Street Journal’s Chinese drywall story (subscription required) is published:
Reporter MP McQueen’s long-awaited piece on the insurance repercussions of this issue in Florida and elsewhere appeared on Thursday, August. 6.
Offshore reinsurance and Neal Bill:
Business Insurance reporter Colleen McCarthy’s piece on the Johnson-Neal legislation, which deals with the taxation of offshore reinsurance ran August 10. She spoke with Bob Hartwig for the story.
Sun-Sentinel looking at Florida Cat Fund purchases:
The South Florida Sun Sentinel’s Julie Patel is working on a story as to why insurers didn’t buy all the coverage they could have bought from the FL Cat Fund. Bob Hartwig spoke with her on the issue. She can be reached at: 954-356-4667; jvpatel@sunsentinel.com.
Cost of being gay subject of New York Times column:
Reporter Ron Lieber is writing a column on the economic privileges that married, heterosexual couples have over gay couples. I.I.I.’s Claire Wilkinson spoke with Lieber for the story, which will look at the cost differences from having a biological child to inheriting a partner’s social security benefits or pension survivor benefits and insurance.
CLUE and credit focus of stories for NAR.com:
Marilyn Evans, a reporter with the National Association of Realtors.com is doing two stories: one on CLUE Reports and another on credit-based insurance scores. I.I.I.’s Loretta Worters spoke with her on the issues. Evans can be reached at 312-259-6350. In addition, a story is in the works by NAR’s John Rea on fireproof siding and insurance premiums. Rea can be reached at 515-778-3717.
Is there a link between an economic downturn and an increase in lawsuits?:
That’s what Bloomberg’s Alexis Leondis is trying to determine. Her story will look at personal excess liability policies, whether more people are buying the policies and the possible correlation between increased lawsuits and a bad economy. She can be reached at 212-617-5773; aleondis@bloomberg.com
Boat fraud focus of CBS website:
CBS News.com’s Lauren Chooljian (chooljianl@cbsnews.com; 212-975-8860) may do a piece on the supposed increase in boat insurance fraud with the bad economy. I.I.I.’s Loretta Worters provided information from NICB to negate the correlation. NICB’s Frank Scaffidi explained there were some cases of “boater give-ups” but nothing out of the ordinary.
Myths to Debunk about Insurance focus of CBS Money Watch.com:
I.I.I.’s Loretta Worters was interviewed by Arrica Sansone (asansone@earthlink.net; 518-383-8585) on home, auto, long term care and life insurance myths and about consumers insuring their homes based on the cost to rebuild not on diminished real estate prices. Market Watch is also planning to do a comprehensive story on flood insurance.
U.S. House of Representatives approves six-month extension of flood program:
The National Flood Insurance Program (NFIP) will be extended through March 31, 2010 without any changes to the program. House Financial Services Committee Chairman Barney Frank has promised Mississippi Congressman Gene Taylor that adding wind coverage to the federal flood program will be brought up for discussion on the House floor. The House approved Taylor’s plan to add wind coverage to the NFIP during the last session of Congress, but it was defeated in the Senate and President Obama’s administration has said it opposes the wind plan. Congressman Taylor also wants an increase in the $250,000 flood insurance coverage limit, as well as an examination of concurrent causation, which he contends allows insurers to bill the government for flood coverage even if the majority of damage was caused by wind. Congressman Frank says Representative Maxine Waters of California, who chairs the Subcommittee on Housing and Community Opportunity, wants to hold hearings on flood insurance later this year.
U.S. Treasury Department holds conference July 31 on regulatory reform:
At the meeting, Treasury Secretary Timothy Geithner reminded regulators that the administration and Congress will set the tone for financial regulatory reform. He told the heads of the Federal Reserve, Securities and Exchange Commission, and the Federal Deposit Insurance Corp. to stop holding up the reform process and said the time for "airing" their concerns was over. The administration’s proposal calls for additional systemic risk oversight powers for the Federal Reserve, which some agency leaders say would leave very little room for checks and balances, and the creation of a new consumer protection agency, which the Fed and others have said would reduce their own authority. The Obama administration’s sweeping overhaul of the nation’s financial regulations is affecting insurers, particularly as lawmakers and industry officials wrangle over the creation of a federal insurance regulator. Draft legislation that the administration sent to Capitol Hill called for the establishment of an Office of National Insurance (ONI) in the Treasury Department, which would monitor “all aspects of the insurance industry” and identify regulatory gaps that could lead to another crisis. But the ONI would not have the power to make or enforce rules on insurers.
Texas FAIR Plan proposes 19.6 percent increase:
Houston Chronicle’s Purva Patel (713) 362-7208; purva.patel@chron.com) wrote a piece which focused on the thousands of homeowners who have policies with the state’s insurer of last resort, and how they are likely to see another double-digit rate increase later this year.
Media Matters:
Business Week has launched a new online column for small businesses. Freelance writer Samantha Marshall and columnist George Cloutier write the bi-weekly column called The Turnaround Ace, which focuses on advice for small businesses based on Cloutier’s experiences helping troubled companies. Marshall previously worked for Crain’s New York Business until 2008. She also worked at The Wall Street Journal Asia. For further details, call 212-512-2511….Michael Thomas has decided to exit The New York Observer after 22 years. Thomas will continue to write his personal blog, Midas Watch….
The Ann Arbor Business Review, which covers businesses and entrepreneurs in Ann Arbor, Mich., is printing its last issue. The magazine, owned by Booth Newspapers, will cease publication with the August 13, 2009 edition….As part of recent buyouts at the Milwaukee Journal Sentinel, columnist Tannette Johnson-Elie has departed the paper. She covered minority business in her weekly column and first joined the paper in 1989 as a general assignment reporter….
The August 2009 edition of Pink magazine is the last print issue to hit stands. The publication, which highlights women in business, will continue online-only.
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