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, July 1, please email Mike Barry at michaelb@iii.org.
Florida’s governor vetoes property insurance deregulation bill:
Soon after the I.I.I. call concluded, Florida Governor Charlie Crist announced his veto of House Bill 1171, which would have deregulated about 40 large property insurers in an effort to improve the state’s private insurance market (thus allowing consumers more choices). Governor Crist contended the measure might actually limit consumer choices, could raise premiums and harm Florida’s homeowners insurance market. State Farm Florida announced earlier this year it would pull out of the state after regulators and an administrative law judge rejected its rate hike request. More on the matter was in the Thursday, June 25, edition of the South Florida Sun-Sentinel.
National Public Radio (NPR) story highlights Florida’s financial exposure in the event of a major hurricane:
NPR’s Marketplace program incorporated its interviews with the I.I.I.’s Bob Hartwig, the Reinsurance Association of America’s Jim Massie and U.S. Rep. Ron Klein (D-Florida) into a Tuesday, June 23, segment on the precarious financial condition of Citizens Property Insurance Corporation and the Florida Hurricane Catastrophe Fund.
Florida’s Office of Insurance Regulation (OIR) and Citizens are at odds over implementation of new law:
A battle is brewing in Florida between the OIR and the state’s insurer of last resort, Citizens Property Insurance Corporation, according to a Tuesday, June 23, Lakeland Ledger article. Confusion caused by a recently approved law could result in thousands of Citizens policyholders getting rate increases well above the 10 percent hike most of them are expecting in 2010. In the alternative, some Citizens customers should get a rate decrease early next year, a top state insurance regulator told the Ledger.
To raise $1 billion, California considers selling half of its state-run workers compensation insurance company:
The day after the call, the Los Angeles Times reported that groups representing small businesses, the insurance industry and California Insurance Commissioner Steve Poizner all oppose Governor Arnold Schwarzenegger’s plan to raise $1 billion by selling a portion of the State Compensation Insurance Fund (SCIF). The sale, part of the governor’s plan to reduce the state’s $24 billion budget deficit, would give private insurers the opportunity to buy approximately 50 percent of the policies issued by the SCIF. The fund has about 22 percent of the state’s workers compensation market.
San Diego Union-Tribune finds California businesses concerned about proposed workers compensation premium hike:
The Workers’ Compensation Insurance Rating Bureau of California, whose board is largely composed of insurance industry representatives, is pressing for a 23.7 percent rate increase, the largest jump in at least 30 years, according to this Sunday, June 21, article in the San Diego Union-Tribune. “It seems unlikely that the bureau’s request will be granted. Some independent insurance analysts suggest that rates should increase by only 4 percent or 5 percent, coming on the heels of a 5 percent rise that Insurance Commissioner Steve Poizner approved late last year,” the reporter notes.
Sacramento Bee says search warrants have been issued to former State Compensation Insurance Board members:
Investigators are exploring whether former board members benefited financially because of decisions they made while overseeing the San Francisco-based State Compensation Insurance Fund, according to a story in the Sunday, June 21, Sacramento Bee. The fund has an annual budget of $3.5 billion and more than 8,000 employees across California, the article says.
Financial crisis is the biggest risk facing insurers, Ernst & Young study says:
Released on Tuesday, June 23, Ernst & Young’s 2nd Annual Business Risk Report – Insurance 2009 ranked the financial crisis, model risk and regulatory intervention as the top three issues facing the insurance industry. Ernst & Young’s press release on its report is here.
Solvency requirements for international insurers are high on regulatory agenda, WSJ reports:
The International Association of Insurance Supervisors convened this week in Taiwan to begin talks on creating the first common rules on solvency requirements for international insurers, according to this Wednesday, June 24, article in the Wall Street Journal (subscription required).
U.S. House hears strong insurer opposition to Consumer Financial Protection Agency’s (CFPA) formation:
The American Council of Life Insurers, NAVA, The Association for Insured Retirement Solutions, and the National Association of Insurance Commissioners (NAIC) testified at a Wednesday, June 24, U.S. House of Representatives’ Financial Services Committee hearing on enhancing consumer financial products regulation. All of the aforementioned organizations are opposed to the Obama administration’s call for the creation of a CFPA.
Reinsurance looking to profile women who are considered up-and-coming stars in the reinsurance field:
Ms. Mairi Mallon, a managing director at rein4ce, a Glasgow, Scotland-based consulting firm, contributes to Reinsurance magazine and can be reached at mailto:mairi@rein4ce.co.uk
Workers compensation law governing civilians in war zones scrutinized by U.S. House subcommittee:
The Defense Base Act was the subject of a Thursday, June 18, U.S. House subcommittee hearing about civilian contract workers who were hired as part of the U.S. war efforts in Iraq and Afghanistan and are supposed to be covered by workers compensation insurance. The proceedings were the subject of this Sunday, June 21, Los Angeles Times story.
Associated Press covers Texas governor’s Hurricane Ike-related event in Galveston:
The AP filed a story about Governor Rick Perry’s Friday, June 19, visit to the Hurricane Ike-damaged University of Texas Medical Branch, an educational institution which secured $150 million in state rebuilding monies during this year’s legislative session. It was picked up in the Houston Chronicle.
Texas Windstorm Insurance Association reform bill signed into law:
Governor Perry’s office issued this press release on Tuesday, June 23, with details about what House Bill 4409’s enactment means for TWIA’s finances and its policyholders.
Dallas Morning News publishes front page story saying auto insurance fraud is on the rise:
More Dallas drivers are either abandoning or destroying their cars, and then reporting them as stolen, in order to collect insurance money, a Monday, June 22, Dallas Morning News article reports.
Louisiana state lawmakers unanimously approve modification to way property insurer of last resort sets rates:
By a 38-0 margin, Louisiana’s state Senate approved Senate Bill 130, which establishes a new way for Louisiana Citizens Property Insurance Corporation to assess premiums. Citizens will still charge a 10 percent surcharge but its rates will be based on premiums charged by private insurers that write at least 2 percent of the property insurance policies in a specific area, according to a Wednesday, June 24, Times-Picayune article.
New Orleans becoming center of universe for attorneys who want to try Chinese drywall cases in federal court:
Plaintiffs’ attorneys flocked to a litigation conference on the topic, held on Thursday, June 18, in New Orleans. It generated a next-day Times-Picayune story.
Michigan’s insurance commissioner responds to heavy flooding in Ottawa County:
The Michigan Office of Financial and Insurance Regulation (OFIR) provided tips in this Tuesday, June 23, press release to auto insurance policyholders affected by the June 20-21 flooding event in Ionia, Michigan (Ottawa County). Drivers with comprehensive auto coverage will be reimbursed for flood damage and many consumers may have coverage for a replacement rental car, too, OFIR Commissioner Ken Ross said.
Media matters:
The Boston Globe’s unionized employees struck a deal to keep the paper in business….The Wall Street Journal has reduced the frequency of its advertising column to twice a week (Mondays and Thursdays). It previously ran every weekday….The New York Times has launched a small business blog on its Web site called You’re the Boss, covering news and policy issues of interest to small business owners and entrepreneurs. Several Times staffers will contribute to the site.
The I.I.I. is cited regularly in the media as an authoritative source of insurance information. To access the current I.I.I. press clips, Click here
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