To recap the issues raised during Wednesday’s conference call, here are some of the key media stories, and the messages we’re conveying.
I.I.I. looks at excess casualty insurance markets:
This presentation by Dr. Robert Hartwig, reviews the tort environment as the U.S. pulls out of the financial crisis, discussing whether the pendulum is swinging against casualty risks and their insurers. The presentation looks at public policy initiatives that are affecting casualty insurance markets, including proposals for financial services regulation and the possible end of the terrorism risk insurance program. The full report can be accessed on the I.I.I. Web site.Massive snowpack in the Upper Midwest and parts of East Coast could result in historic flooding this spring, NOAA reports:
This March 17 Wall Street Journal (subscription required) article takes a look at the seasonal flood forecast developed by Jane Lubchenco, head of the National Oceanic and Atmospheric Administration. The threat of flooding is highest in the Dakotas, Minnesota and Iowa, a region that received approximately four times the average amount of precipitation in December and was also affected by the flooding of the Red River last year.NFIP profiled as part of the NBC Nightly News’ periodic ‘Fleecing of America’ series:
The show, which aired March 17. focused on the FEMA flood zones, intimating that FEMA has been forcing homeowners to buy unnecessary flood insurance. It noted there were 24 states where citizens complained of inaccuracies and that KCTV interviewed an NFIP official who admitted the maps were faulty. The story questioned whether NFIP was trying to “balance the books by soaking the public.” The next installment in the series focuses on the beach erosion problem in the U.S.Former Insurance Superintendant Dinallo, running for New York AG, has received more than 15 percent of his campaign donations from insurance industry:
Bloomberg Business Week.com reporter Joel Schectman wrote that Dinallo got at least $290,000 of his $1.78 million in donations from companies, people and trade groups with ties to the industry, according to campaign disclosures through mid- January. Hedge-fund manager David Einhorn, chairman of reinsurer Greenlight Capital Re Ltd., gave the maximum amount of $55,900. So did Joseph Plumeri, chief executive officer of insurance broker Willis Group Holdings Plc, where Dinallo worked in 2006.
70 Miles Per Hour Is The New 55:
This Wall Street Journal article (subscription required) by Joseph White looks at an analysis of speed data from TomTom Inc., a company that markets GPS navigation devices, which shows that drivers in the U.S. tend to drive approximately 70 miles per hour on open stretches of interstate highways without regard to the existing speed limits. The study shows why safety advocates are finding it so difficult to convince authorities to lower speed limits on the nation’s freeways.
Hartford Financial Will Repay $3.4 Billion of TARP Funds Within 10 Months:
This was reported by Bloomberg News March 17, as well as by the insurance trade press. The company plans to sell shares and debt to raise funds to repay its $3.4 billion U.S. rescue within 10 months. The offerings will include about $1.45 billion of common stock.
Fortune looks at the world’s most admired companies:
The March issue of the magazine annually ranks the world’s most admired companies, including a list of companies by industry. The rankings include two insurance lists: life and health and property/casualty. The life and health list includes eight companies, topped by New York Life, followed by AFLAC and MetLife, respectively. The property/casualty list also includes eight companies, led by Berkshire Hathaway, followed by Zurich Financial Services and Swiss Reinsurance.
Restoring American Financial Stability Act of 2010 introduced by Senate Banking Committee chairman Dodd:
The introduction of the bill prompted a number of stories on March 16 regarding financial services reform and the pros and cons of giving enhanced powers to the Federal Reserve Board. The New York Times, Business Insurance, Best Week, and the I.I.I. blog Terms & Conditions provided overviews. Apart from the establishment of an Office of National Insurance within the Treasury, there are a couple of key takeaways from the insurance industry perspective. On the issue of systemic risk the proposed legislation would establish a Financial Stability Oversight Council that would oversee any nonbank financial companies that pose risks to the financial stability of the United States. The plan would also create a $50 billion pre-event resolution fund, financed by assessments on the largest financial firms, including insurers.
Wall Street Journal looks at financial services industry regulation:
ReporterKara Scannell’s article on March 17 looks at the regulation of the financial services industry and such broad issues as the role of the Federal Reserve in overseeing financial companies. Several Republican senators are criticizing a provision in the bill recently introduced by Senate Democrats that would significantly expand the power of shareholders. The provision addresses a relatively obscure issue referred to as “proxy access” and would provide investors with more control over the process of electing corporate directors. The measure, which has been the subject of previous regulatory debate, would give the Securities and Exchange Commission the authority to pass rules that allow certain shareholders to nominate directors on a company’s ballot.
No New Money in Mississippi Wind Pool:
The Biloxi Sun Herald’s Michael Newsom reported on March 15 that Gov. Haley Barbour vetoed a homeowner insurance wind pool bill he thought was unnecessary, and Insurance Commissioner Mike Chaney said new money for the program does not appear likely this legislative session, given the state’s budget woes.
Sarasota Herald-Tribune spends year investigating Florida insurance industry:
Reporter Paige St. John had a lengthy article on March 15—part of a series the paper is publishing on the insurance industry in Florida. The story reported that nearly half of the state’s home insurance is now provided by companies whose primary profit comes not from insuring homes but from diverting premiums into various side ventures. With large national insurers such as Allstate and State Farm leaving the state and causing homeowners to scramble for coverage, the story contends that Florida legislators have intentionally relaxed rules that police insurer profits, with regulators hoping the promise of profits will persuade investors to create new companies. The newspaper spent more than a year investigating the Florida insurance industry, reviewing financial filings of more than 70 Florida-only companies that now provide nearly three-quarters of the private property coverage in the state. It lists its findings, which include overhead costs being 50 percent higher in Florida than the national average.Chinese Drywall continues to make headlines in Louisiana:
The Baton Rouge Advocate’s Ted Griggs wrote an article March 14 in which the Louisiana Home Builders Association says the state should establish an application process regarding problems homeowners are having with Chinese Drywall. That way, when a remediation method is approved and if money is made available, homeowners will not face additional delays before getting help. In addition, Times Picayune reporter Becky Mowbray wrote an article on March 14 focusing on a Chinese Drywall case that was underway.
Brandi Grissom of Texas Tribune writes about the repeal of the Driver Responsibility Act:
A March 15 article, titled ‘Driven to Repeal’, looks at the more than 1.2 million Texas drivers who have lost their licenses because of unpaid surcharges. Texas legislators approved the Driver Responsibility Act in 2003 to encourage safer driving and raise money for Texas roads and hospital trauma centers. The program attaches hefty state surcharges to traffic citations like speeding, driving without insurance, driving without a license and driving while intoxicated. In addition to paying the fines and court costs associated with the ticket, drivers must pay an annual surcharge ranging from $100 to $2,000 or their license is suspended.
New poll finds Meg Whitman in dead heat with Democrat Jerry Brown:
A piece by the AP’s Juliet Williams ran in the March 17 Los Angeles Times and describes a new poll that finds former eBay chief executive Meg Whitman, a billionaire Republican, running away with the GOP race in California. The Field Poll also shows she has opened an even wider lead against her challenger in the GOP primary, state Insurance Commissioner Steve Poizner. Whitman now leads Poizner by 48 percentage points.
