To recap the issues raised during Wednesday’s conference call, here are some of the key media stories, and the messages we’re conveying.
Los Angeles Times editorial board believes U.S. Senate bill, if enacted, would make California Earthquake Authority’s (CEA) policies more affordable:
The CEA’s premium rates and large deductibles have discouraged about 88 percent of Californians from buying a CEA policy, the LA Times editors believe, but U.S. Senate Bill 637 would allow the CEA to reduce its rates and deductibles. SB 637, sponsored by U.S. Senator Barbara Boxer (D-California), would provide a low-cost alternative to commercial reinsurance by authorizing the state to issue federally guaranteed bonds, according to this Saturday, March 19, LA Times editorial.
Two U.S. Supreme Court rulings, while narrow in scope, are seen as making it easier for stockholders and employees to file lawsuits against companies:
In a unanimous ruling on Tuesday, March 22, the U.S. Supreme Court decided that a lawsuit filed by a group of investors against Matrixx Initiatives, the manufacturer of Zicam, a cold remedy, could proceed. The court agreed that Matrixx should have disclosed that some people who used Zicam nasal spray lost their sense of smell. In the other ruling, the court said that an oral complaint against an employer was sufficient for a worker to be protected against retaliatory action such as firing, according to a same-day Washington Post article.
Catastrophe bond market proves profitable, even when catastrophes strike, Bloomberg BusinessWeek finds:
Catastrophe bonds, securities sold by insurers and reinsurers to help cover their most extreme risks, have returned profits totaling 64 percent over the past five years, with gains even in 2005, following Hurricane Katrina, and in 2008, after the collapse of Lehman Brothers Holdings Inc., according to the Swiss Re Cat Bond Total Return Index. The Bloomberg BusinessWeek story was posted on Tuesday, March 22.
I.I.I.’s president critiques Rutgers law professor’s take on P/C insurer claims handling in New Orleans:
I.I.I. president Bob Hartwig gave this presentation on Thursday afternoon, March 24, at the annual conference of the Council of Litigation Management (CLM). It was in response to the book published last year by Rutgers, New Jersey, law school professor Jay Feinman. Professor Feinman, who sat on the same CLM panel as the I.I.I.’s Hartwig, wrote Delay, Deny, Defend.
Kiplinger trying to compile list of 10 U.S. cities most vulnerable to natural disasters:
Kiplinger reporter Cameron Huddleston said she is having difficulty quantifying which cities are more dangerous than others because the insured loss data is maintained on a state level. She can be reached via email: chuddleston@kiplinger.com, if you want to offer information for this story.
CBS Sunday Morning airs piece in advance of Triangle Fire’s 100th anniversary:
The seven-minute segment was broadcast on Sunday morning, March 20. The 100th anniversary of the Triangle Fire, which killed 146 people and was the deadliest workplace disaster in New York City prior to 9/11, is being commemorated on Friday, March 25.
I.I.I. tapes interview with Time magazine editor-at-large who wrote book on Triangle Fire:
The I.I.I.’s Mike Barry taped a video interview on Wednesday, March 23, with Time’s David Von Drehle, who wrote Triangle: The Fire That Changed America (Grove Press, 2003). It is posted on our Triangle Shirtwaist Factory Fire Centennial page. The conversation took place at the site of the fire, which is now home to New York University’s Brown Building in the Greenwich Village section of Manhattan, and touched on issues such as workers compensation and workplace safety. In addition, the I.I.I.’s Barry spoke with National Underwriter’s Chad Hemenway and Risk & Insurance magazine’s Cyril Tuohy for their Triangle-related stories.
New York City staged-accident arrests prompts New York Post to call defendants ‘crash dummies’:
The New York Post’s colorful take on the case was followed on Thursday, March 24, by an Allstate news release, in which the auto insurer acknowledged receiving claims tied to this group’s alleged staged crash. The I.I.I.’s Jeanne Salvatore and the I.I.I.’s Loretta Worters provided background information to WCBS-TV and WPIX-TV, respectively, about the growing problem of no-fault fraud in New York State.
Illinois’ Michael McRaith named first-ever chief of the U.S. Treasury Department’s Federal Insurance Office:
This Thursday, March 17, Dow Jones Newswire article offers details.
National Association of Insurance Commissioners’ spring meeting scheduled for this weekend in Austin, Texas:
The NAIC’s agenda is here, and the Saturday, March 26, 3 p.m. gathering of the NAIC’s consumer liaison committee (see bottom of page 3) could generate trade press coverage because it usually features presentations by the most outspoken industry critics.
Texas Windstorm Insurance Association’s board ousts its general manager; national search launched to find a successor:
The TWIA board met for almost 10 hours at its regularly scheduled meeting on Tuesday, March 22, and their decision to relieve general manager Jim Oliver of his duties came during their executive session, according to this next-day National Underwriter story. TWIA has retained a Chicago-based recruiter to find a new general manager, the article says.
Katrina-related class action suit involving a major hospital in New Orleans is settled:
Since the call, Ochsner Baptist Medical Center, formerly known as Memorial Medical Center, and Ochsner Health System, the company that purchased the hospital from Tenet Healthcare after Hurricane Katina hit New Orleans in 2005, settled a class-action lawsuit involving the deaths and injuries of patients stranded at the hospital during the disaster. The settlement requires court approval, according to this Wednesday, March 23, Associated Press article. Joseph Bruno, a lawyer representing the families who are plaintiffs in the class action, said the court’s decision should be made in a few weeks. Kurt Blankenship, a lawyer for the defendants, said that the parties agreed that the terms of the settlement should remain confidential. Approximately 2,000 patients, medical workers and other members of the hospital’s staff were stranded at the hospital by the flooding from Hurricane Katrina. Forty-five bodies were eventually recovered from the hospital. The lawsuit was filed on behalf of the family of one of the patients who died, as well as by other patients and those whose relatives died or were injured.
AP, Fox Business News, Consumer Reports and Reuters have insurance stories in the works:
The I.I.I.’s Worters has been dealing with the Associated Press’ Carol Feldman (email: cfeldman@ap.org) on the issue of fallen trees and insurance; FoxNews.com’s Craig Caruana (email: craig.caruana@foxnews.com) regarding a story he is compiling on the amount of earthquake premiums written in each state; Consumer Reports’ Bob Huerester on the issue of how many cars are totaled in the U.S. each year, and then sent to salvage yards; and Ben Berkowitz of Reuters on how well-prepared insurers are for earthquakes, and whether the industry will change the way it does business in light of the Japan quake/tsunami.
Louisiana’s Citizens policyholders to see 6.5 percent premium rate increase effective July 1, 2011:
The Baton Rouge Advocate’s Saturday, March 19, edition reported that Citizens’ nine-member board had originally requested an increase of 9 percent but Louisiana Insurance Commissioner James Donelon reduced it, saying the difference between the rate requested and the rate approved was because Citizens is not really an insurance company; it does not have to set aside surplus and reserves to pay claims the way private insurers do. The Citizens board approved the rate hike, 5-4.
Alabama stepping up efforts to reduce the state’s number of uninsured motorists:
With nearly one in four Alabama drivers believed to be uninsured, the state Legislature is considering a measure that would set up an electronic database to track compliance with the state’s mandatory auto insurance law. It has passed the Alabama Senate and has been sent to the House Judiciary Committee. The intent of the bill is to establish a system to help law enforcement officials catch drivers who pay a small down payment for an inexpensive insurance policy, get a valid insurance card and then stop paying for the coverage, causing the policy to be canceled. The insurance industry supports the measure, according to this Sunday, March 20, article in The Birmingham News.New York City Council is trying to block Bloomberg administration’s imposition of a fire department ‘crash tax’:
The Wednesday, March 23, edition of The Wall Street Journal (subscription required) said the FDNY’s ‘crash tax’ proposal may go into effect on July 1, 2011, even if the City Council passes a resolution opposing its enactment.
Maryland considers measure to expand restrictions on auto insurer use of credit-based insurance scoring:
PCI reports that the bill cited in this Tuesday, March 22, Insurance Journal story has stalled in the state’s House of Delegates and is unlikely to become law during the current legislative session.
Florida’s Senate Bill 408, controversial because of its potential impact on sinkhole coverage, clears some hurdles:
The Florida state Senate’s Budget Committee approved SB 408, a measure that would allow property insurance rate increases and enable insurers to drop full sinkhole coverage, on Tuesday, March 22, according to this same day Palm Beach Post story. The passage came on a 12-8 vote after approval of two changes proposed by Florida state Senator Mike Fasano (R-New Port Richey): 1) removing a provision allowing insurers to withhold part of a claims payout before repairs are made; and 2) adding a provision requiring insurers to get approval from regulators before implementing rate hikes.
