SYNOPSIS ALL INDUSTRY CONFERENCE CALL June 29, 2011

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 6, please email Mike Barry at michaelb@iii.org.

 

Tropical Storm Arlene weakened as it moved inland over Mexico on Thursday, June 30, a day after the I.I.I.’s media call:  Nonetheless, Arlene dropped significant rainfall in various parts of Mexico, according to this Friday, July 1, AccuWeather.com article.  TS Arlene’s wind speed peaked at 65 miles per hour, Bloomberg News reported.

 

NBC Nightly News reports that only about 375 of the 4,000 flooded residential properties had flood coverage:  The Souris River crested on Sunday, June 26, at roughly 6.5 feet above major flood stage, and FEMA is offering low-interest loans to qualified Minot, North Dakota, homeowners who are looking to rebuild, according to this Monday, June 27, NBC Nightly News story.  The flood insurance statistic is mentioned near the very end of the two minute-plus story.

Spot fires are being extinguished in the mountains above Los Alamos, where a government nuclear laboratory is located:  The wildfire’s flames were visible in Los Alamos, in northern New Mexico, where 12,500 residents were evacuated, according to this Wednesday, June 29, USA Today story. Police Chief Wayne Torpy said that the evacuation was calm and orderly. The wildfire destroyed 30 structures near Los Alamos. The lab has been closed, and the wildfire reminded many of May 2000 blaze that destroyed hundreds of structures in Los Alamos, the article states. Lab officials told the paper that radioactive materials were safely stored.

Studies assess whether anti-lock brakes can help riders stay upright when the cycle is stopped suddenly, thereby reducing fatalities:  Motorcycles equipped with anti-lock brakes were 37 percent less likely to be involved in deadly crashes than bikes without them in 2010, according to the Insurance Institute for Highway Safety. While auto makers and drivers are now rapidly taking advantage of safety technology, the motorcycle industry and cyclists have given less attention to these types of innovations, this Wednesday, June 29, Wall Street Journal (subscription required) article explains.BMW AG will make anti-lock brakes standard on all of its 2012 models, the story states.

“All you need is term” and “we rarely have to pay up” make it into the Top 5:  The Jilian Mincer article was posted online at SmartMoney.com.

Almost half of the QCs came from five states: California, Florida, Michigan, New York, and Texas.  The data is from 2008-2010, and the NICB’s report was summarized in this Tuesday, June 28, news release.

Alaska’s Aleutian Islands shook on Thursday evening, June 23; quake’s epicenter was about 1,200 miles southwest of Anchorage:  No injuries or property damage was reported after the significant seismic event but the Associated Press quoted government officials who expressed concern about the failure of a tsunami warning system.

Florida, Hawaii and Texas ranked near the lowest in this same category:  Heartland Institute Senior Fellow Eli Lehrer’s findings can be found here.

The policy will be offered starting on Monday, July 11, The New York Times reports:  New York Life will soon begin to market what it calls a "guaranteed future income annuity,” according to this Tuesday, June 28, New York Times blog item.  It is similar to a basic immediate annuity, which provides a lifetime stream of income, but the income is deferred, beginning at an agreed upon point in the future. The story explains how the product works, providing a detailed example with specific figures. In addition, the article also discusses potential drawbacks, including the role of inflation, the financial stability of the provider and the fact that the policyholder may not live long enough to benefit from all the money given over to the insurer.

New York State’s Court of Appeals rules that the New York State Insurance Department does not have the final word on the legality of MBIA’s restructuring: The Court of Appeals’ Tuesday, June 28, decision reversed one made by a lower court that moved to dismiss a lawsuit against MBIA that was filed by banks, including ABN AMRO Bank NV, which purchased insurance from MBIA on bonds backed by mortgages and other securities.  The Wall Street Journal (subscription required) posted this same-day story on the ruling’s potential impact.

 

I.I.I. information likely to find its way into upcoming articles:  The I.I.I.’s Mike Barry has been working with Smart Money’s Elizabeth O’Brien and Kiplinger’s Lisa Gertsner for their upcoming stories on how U.S. auto and homeowners insurance policyholders can cut their premium costs without substantially reducing their coverage levels.  Smart Money also requested and received historical data showing net written premium trends in these two lines of insurance.  The Kiplinger’s story is slated for publication in the magazine’s September 2011 edition.

The Alabama Department of Insurance has heard from about 500 people with questions/complaints about the industry’s response to the April 27 tornado outbreak:   But Insurance Commissioner Jim Ridling has said it is not the state’s role to order an insurer to pay more when people complain they are not being offered what they believe to be a fair settlement, according to this Tuesday, June 28, Press-Register editorial. The paper’s editors point out that the commissioner is right but goes on to say that he is missing an opportunity to gather more input from those going through the claims process and that to ignore policyholder angst makes him appear to be insensitive. The editorial board credits Ridling for getting insurers to agree to pay for the replacement cost of homes, even when the owner wants to rebuild at a different site. Its opinion piece concludes that, as the claims process moves ahead, Alabama’s insurance department will probably set up a mediation program to resolve disputes.

Alabama’s property insurers anticipate reinsurance rate increases of anywhere from 7 to 10 percent:  The Sunday, June 26, edition of the Birmingham News sourced that piece of information to Commissioner Ridling, who said post-tornado reinsurance cost spikes may prompt homeowners insurance premium rate increases in Alabama sometime soon.

The International Association of Special Investigation Units (IASIU) is donating $10,000 toward the cause:  The IASIU’s contribution will be used to purchase and place a permanent memorial in their honor at the Louisiana Insurance Department’s grounds in Baton Rouge, and any remaining money will go to the estates of Rhett Jeansonne and Kim McElveen-Sledge, IASIU members who were killed in the line of duty on Tuesday, June 7, in Ville Platte, Louisiana.

 

The Association of California Insurance Companies issued this Wednesday, June 22, news release explaining its opposition to Assembly Bill 228, which would enable SCIF to keep its preferential tax status while allowing SCIF to conduct itself like a private-sector insurer with business in multiple states.

The new regulations, which went into effect on Monday, June 27, impose a uniform standard for insurers and brokers to estimate the notion of "replacement value:” California Insurance Commissioner Dave Jones said the regulatory changes will "go a long way toward ensuring that consumers who are victims of a disaster, such as a wildfire, are able to get the financial relief to rebuild their homes and their lives." The San Diego Union-Tribune filed this same-day story on a Monday, June 27, press conference in San Diego that featured Commissioner Jones and Amy Bach of United Policyholders.   The regulations are the subject of litigation, as well.

Spokesman Review reports auto theft investigators are being reassigned in a move expected to save $3.5 million over two years:  The Washington State Patrol says that state budget cuts mean Patrol detectives who previously conducted long-term investigations into major car theft rings and chop shops will focus on other, less-costly assignments effective Friday, July 1, according to this Saturday, June 25, Spokesman Review article.  Spokane, Washington was the city with the fourth-most auto thefts in 2010, the National Insurance Crime Bureau found.

The National Weather Service place many parts of northern Utah under flood watches and warnings: The details are in this Wednesday, June 29, Salt Lake Tribunearticle. The Salt Lake and Utah valleys, the western Uinta Basin, Rich County and the Wasatch Mountains north of Interstate 80 were all deemed at risk for fresh flooding.

Shenandoah would become a wholly-owned subsidiary of United Prosperity Life Insurance Company, if the transaction is approved.  The State Corporation Commission (SCC) has announced it will hold a public hearing on Tuesday, October 11, 2011, at 10:30 a.m., in downtown Richmond, Virginia, to consider Roanoke-based United Prosperity’s planned acquisition of Shenandoah, a company which has been in receivership since February 2009.  The details are in this Monday, June 27, SCC news release.

State Representative Jim Riesberg, a Democrat from Greeley, CO, resigned his elective post to become the state’s Insurance Commissioner effective Friday, July 1:  The appointment was announced by Governor John Hickenlooper on Monday, June 27.

Gallup Poll finds Americans have regained some confidence in newspapers, TV news:  28 percent of Americans surveyed this year say they have a ‘great deal’ or ‘quite a lot’ of confidence in the integrity of the newspapers that they read, a three-point spike over the 2010 figure.  Meanwhile, 27 percent of Americans offered the same opinion of the television news they viewed, with that figure having risen five points in the past year. The Gallup poll was released on Monday, June 27.

The story prompted the regulatory debate last summer about life insurer use of retained asset accounts (RAAs):  The issue has since receded from the headlines because a National Association of Insurance Commissioners’ survey released late last year found only about half of all the major U.S. life insurers even use RAAs when paying beneficiaries.  This Tuesday, June 28, news release lists the award winners (look under News Services division for Evans’ name).

 

— Tropical Storm Arlene was trending earlier this week on Twitter.  The popularity of this issue shows the level of interest, and perhaps concern, about what’s predicted to be an active hurricane season.

 

–Ben Berkowitz of Reuters tweeted about a Barclays Survey which found that 70 percent of large insurance buyers expect to pay flat-to-higher rates as a result of the multiple natural disasters which have struck worldwide during the first half of this year.  The firm’s survey of 50 large buyers showed insurers are more disciplined, with multi-year deals absent from the market.

 

–Julie Patel of the South Florida Sun Sentinel tweets, “Homeowners report insurers are revoking discounts for new tile roofs, one of the most common discounts in South Florida.”  Patel links to an article she wrote about how a type of sturdy roof tiling, effective at withstanding hurricanes, once almost automatically got homeowners an insurance discount.  Now, due to the state’s complicated new state inspection form, it is harder for homeowners with these types of roofs to get a premium rate reduction, Patel wrote.

 

–Insurance.com’s “Why Does Everyone Hate No-fault Car Insurance?, an article we’ve mentioned previously and which quotes the I.I.I.’s Barry, is still a popular piece of content being tweeted on this week.   All shares are coming from Twitter handles that specialize in “how to buy insurance.” 

 

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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