SYNOPSIS ALL INDUSTRY CONFERENCE CALL July 20, 2011

If there is a subject you would like to see addressed on Wednesday, July 27, please email Mike Barry at michaelb@iii.org.

 

Written by Amy Danise, the piece, posted on Wednesday, July 20, takes insurers to task for their supposed inability to keep young policyholders happy, launch engaging social media campaigns, and track down lost life insurance policies, among other things.

But lenders who deny credit, or offer a prospective borrower a higher-than-usual interest rate on a loan, must share with that customer his or her credit score, according to this Tuesday, July 19 Smart Money article, on a new federal rule that takes effect on Thursday, July 20.

The article provides advice on how to protect property against earthquakes, tornadoes, floods and hurricanes and how to get better insurance coverage by checking a policy’s payout limits and buying the right extra coverage. A chart accompanying the two-page article (pages 41 and 42) shows the risk of certain natural disasters by region in the U.S. and the approximate cost to insure against each one. The I.I.I. and the Insurance Institute for Business and Home Safety are among the industry sources cited.

 

Aon Risk Solutions and NSM Insurance Group are offering coverage to their brokerage clients in response to the growing problem and the expense of dealing with it. It can cost hotels an average $600 to $800 per room to get rid of bedbugs, according to The Hartford Courant’s Tuesday, July 19, article on the issue, an amount that does not take into account lost income.

Volvo XC60s equipped with City Safety, a crash-avoidance device, have less risk of low-speed collisions compared with midsize SUVs without the feature, according an HDLI study. “As people grow more aware of the risks of distracted driving, crash-avoidance systems like this one can help to ensure that a momentary lapse of attention during a congested commute doesn’t result in a crash,” said Adrian Lund, HDLI’s president. Their Tuesday, July 19, news release offers details.

The Wall Street Journal’s Leslie Scism reached out to the I.I.I.’s Bob Hartwig about trends among U.S. property insurers of last resort, although it is unclear whether an article on the issue will materialize….The Chicago Tribune’s Dan Hinkel (Phone: 312-404-1997) has been receiving from the I.I.I.’s Loretta Worters information about civil lawsuits against municipalities involving DNA tests, and their insurance repercussions….A.M. Best’s Diana Rosenberg has been working with the I.I.I.’s Mike Barry on a story she is preparing on auto insurer reserve redundancies, an issue explored in depth in the May 16, 2011 edition of Auto Insurance Report.

 

The Commission would “examine the risk posed to the U.S. by natural catastrophes, the means to mitigate those risks, and ways to pay losses caused by natural catastrophes.”  Business Insurance (subscription required) reported on Monday, July 18, that the commission would accomplish these goals by “assessing the condition of the property and casualty insurance and reinsurance markets prior to and in the aftermath of Hurricanes Katrina, Rita, and Wilma in 2005 and the major hurricanes that struck the United States in 2004.” 

 

The Insurance, Housing and Community Opportunity subcommittee will convene to discuss FIO at 2 p.m.  The session, to be held in Room 2128 Rayburn, Washington, D.C., is the final item listed in this statement issued by Rep. Spencer Bachus (R-Alabama), chairman of the U.S. House of Representatives’ Financial Services Committee, on Friday, July 15.

 

The details have not as yet been finalized but former Kentucky insurance commissioner S. Roy Woodall Jr. , President Obama’s nominee for the insurance post on FSOC, may appear before the U.S. Senate’s Banking, Housing and Urban Affairs committee early next week.

 

This key provision would, if enacted, put the burden of proof on insurance companies when denying homeowners claims. Insurance Commissioner Mike Chaney, who is seeking another four-year term in November, and two candidates for lieutenant governor this year, Billy Hewes and Tate Reeves, have issued statements in support of Kevin Buckel’s proposed law.  The measure calls for “adopting into legislation rulings by the state Supreme Court and federal court that insurance companies have the burden of proof when they deny a homeowner’s claim,” according to this Saturday, July 16, Biloxi Sun Herald blog item.  

 

The Press-Register’s Sunday, July 17, editorial points out that the flood program could not continue on its current course because the NFIP owes the federal government almost $18 billion and taxpayers cannot afford to keep footing the bill. The legislation passed in the U.S. House of Representatives earlier this month (House Resolution 1309) would increase the NFIP’s income by $4.2 billion over 10 years, putting more private-sector mechanisms in place, such as phasing in actuarially sound rates and increasing the minimum deductible, according to the editorial.

The session will get underway at 1 p.m. The body of the article (listing August 1 as the meeting date) is correct whereas the headline (citing Tuesday, August 2) is not.

 

An auditor has charged the state’s Office of Community Development’s (OCD) Disaster Recovery Unit (DRU) with mismanaging the HMGP.  The audit, released on Wednesday, July 13, by Louisiana’s Legislative Auditor Daryl Purpera, said that the DRU is not properly processing and tracking HMGP applications, a program that has to date paid out more than $260 million in federal monies to about 6,300 Louisiana homeowners, according to this Monday, July 18, Associated Press article. 

Citizens CEO James Malone made the observation in an interview with the Naples News. The focus of the Friday, July 15, piece was on calls to privatize over time the total book of business of Florida Citizens Property Insurance, an idea gaining currency with Citizens’ CEO Malone and Florida Governor Rick Scott. The I.I.I.’s Lynne McChristian was quoted in this Wednesday, July 13, Naples News story covering the same topic.

Critics say the Department of Financial Services handles complaints against insurance company claim adjusters differently than those filed against public adjusters. Florida state data for the past two years show that when complaints are handled against company adjusters, there is a less than 16 percent chance of disciplinary action while there is a 75 percent chance of discipline being taken against public adjusters, according to this Friday, July 15, South Florida Sun-Sentinel article.

Governor of Texas shifts the state’s oversight responsibility for rebuilding to the Texas General Land Office: The city of Galveston, which received $160 million in government monies to rebuild and repair 1,033 storm-damaged houses for low- and middle-income families, has the largest ongoing post-Ike rebuilding program in Texas while Houston has the fifth-largest, having received $82 million in public funds to rebuild and repair 242 houses and apartment buildings damaged by Hurricane Ike in September 2008, the Friday, July 15 print edition of The Houston Chronicle reports. 

Houston Chronicle reports some TWIA, FAIR Plan policyholders to get premium credits for their delayed Ike claims:  As part of a settlement with the Texas Department of Insurance (TDI), the Texas Windstorm Insurance Association (TWIA), and the Texas Fair Access to Insurance Requirements (FAIR) Plan, will give to certain policyholders 18 percent premium credits “as interest on claims that weren’t paid within deadlines set out in the state’s insurance code” and agreed to treat roof shingles unsealed by hurricane winds as damaged, according to this Chronicle article, which was posted on Monday, July 18.  The Chronicle also interviewed new TWIA general manager John Polak last weekend about changing TWIA’s corporate culture.

Stanford University and the U.S. Geological Survey hope the network will prove valuable in quickly detecting even small quakes. The initiative is aimed at supplementing more sophisticated government seismic networks, according to this Sunday, July 17, article in The San Francisco Chronicle. “Starting this weekend (July 16-17), crews are installing sensors in about a hundred homes and offices of volunteers who have already signed up for a project called The Quake-Catcher Network,” the article states. 

Cost Recovery Corporation’s (CRC) fees higher are than what Macedonia, Ohio, thought they agreed to pay CRC, and the CRC collected only 27 percent of the police-related bills in 2010, according to a front page story in the Sunday, July 17, edition of The Akron Beacon Journal.  Bob Dyer, a Beacon Journal columnist, called Macedonia, Ohio’s ‘accident tax’ highway robbery and urged Ohio state lawmakers to ban municipal accident response fees in this column, which appeared in the paper’s Tuesday, July 19, print edition.

Hail clogged storm drains, contributing to flooding in Cheyenne, Wyoming’s downtown and the Wyoming Tribune Eagle posted online a series of dramatic next-day photos of the aftermath of the Monday, July 11, storm. This Friday, July 15, Wyoming Business Report article reports that thousands of claims, totaling in the tens of millions of dollars, may be filed with auto and home insurers. Meanwhile, a hail storm in northern Colorado on Wednesday, July 13, generated nearly 30,000 auto and homeowners claims totaling about $165 million, in places like Fort Collins and Loveland, according to this Tuesday, July 19, Coloradoan article.

–Julie Patel of The South Florida Sun-Sentinel recently tweeted several items about Allstate’s Castle Key insurance company and its proposed 31 to 36 percent average statewide rate hikes. Castle Key, the third largest private home insurer in Florida, fielded questions from regulators and a consumer advocate on Tuesday, July 19, and, like other Florida-based property insurers, said it needs the premium rate hikes this year due to rising reinsurance costs and claims payouts.  Florida policyholders are responding with a mix of frustration and disbelief that these rate hikes are necessary.

 

–Ben Berkowitz of Reuters tweeted this week about the most expensive keyword category on Google AdWords being the word, ‘insurance’.  Google has made over $33 billion from online advertising in the past 12 months and the list of top keyword categories is clearly the result of people turning en masse to the Web in search for help about financial, educational, professional services or medical aid. WordStream, the company that compiled the study, concludes that the keyword categories with the highest volumes and costs represent industries with very high lifetime customer value.  

 

–I.I.I. content is appearing on a blog called Ask Tim, which specializes in answering technical insurance questions. The blog features written articles as well as podcasts and videos all about insurance issues, many of them very detailed and precise.

 

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