SYNOPSIS ALL INDUSTRY CONFERENCE CALL October 20, 2010

National Underwriter publishes Professor Daniel Schwarcz’s rebuttal to I.I.I. president’s op-ed on homeowners insurance policies:

Dr. Robert Hartwig’s Final Say column (‘Greater Choice Key to Homeowners Market’) appeared in the publication’s online and print editions on Monday, October 11. In response, and in advance of his presentation at the October NAIC meeting, Professor Schwarcz authored a rebuttal which will appearin the October 25 edition of the magazine and has already appeared online. Dr. Hartwig is considering a response.

The NAIC surveyed 30 life insurance companies (representing 70 percent of the market) and found that only half use retained asset accounts.

NAIC revisits retained asset account issue on Monday, October 18:

The Wall Street Journal’s Leslie Scism covered the Monday, October 18, meeting of the National Association of Insurance Commissioners’ (NAIC) retained asset working group session in Orlando, Florida, as part of the regularly scheduled NAIC fall meeting. No article has yet been written; however, she wrote in an article, Wednesday, October 20, that state regulators are revising proposed measures aimed at preventing professional investors from using retirement income products as no-risk market bets, addressing industry concerns about depressing sales to ordinary consumers. Scism noted that a committee at the NAIC agreed to revise its planned bulletin to insurers after taking public comment, much of it focused on a proposed suggestion to add medical questions on the product’s application form.

National Underwriter’s Mark Ruquet wrote online on October 20 that the NAIC leadership fully expects to see a significant number of new regulators based on a combination of retirements and the results of the upcoming midterm elections. The NU Online News Service reported on Monday, October 17, that during a meeting of the American Council of Life Insurers in Washington, D.C., it was noted that the upcoming elections could result in as many as 17 new insurance commissioners. The article said that “speculation at the ACLI is that incoming NAIC Chairwoman Susan E. Voss, insurance commissioner of Iowa, could be among those ousted from their posts.”

Biloxi Sun Herald’s Anita Lee had a piece on October 15 that notedCoastal American Insurance Company announced it was entering the Mississippi Gulf Coast homeowners insurance market in April and would now offer new discounts that could lower the price of its coverage for customers who own newer homes. Mississippi’s wind pool, which had about 16,000 policies before Hurricane Katrina, now has more than 46,000. The state hopes that private insurers, such as Coastal American, will help shrink that number. The article provides an example of the cost and types of coverage with a policy from Coastal American, versus a wind pool policy.

Reported by the Wall Street Journal’sWilliam Launder and Erik Holm on Wednesday, October 20. The article (subscription required) notes that investor Warren Buffett is increasing his share of the company. According to a regulatory filing, Buffett and Berkshire Hathaway currently own more than 10 percent of Munich Re, a holding valued at 2.1 billion Euros ($2.9 billion) based on Munich Re’s current market capital. Munich Re has said repeatedly that Buffett has no plans to influence the management of the company or its dividend policy. Ben Cohen, Europe analyst at Collins Stewart, said that it seems that Buffett is interested in Munich Re only as a stable investment.

A study recently released by Quality Planning, a unit of Verisk Analytics shows which vehicles receive the most tickets and suggests which drivers are more likely to be stopped by police officers, this October 20 Wall Street Journal article (subscription required) reports. Researchers have found that drivers of expensive, high performance luxury cars have trouble resisting the temptation to test the vehicle’s potential on the open road. The Mercedes SL is the most ticketed model while the discontinued Buick Rainier SUV is the least ticketed. 

Emmet Pierce, who used to write for the San Diego Tribune and now has his own communications firm, is writing a similar story for MSN. 

TheWall Street Journal’s M.P. McQueen reported on this subject in an October 18 article. One way Congress has tried to help homeowners is by enacting a special IRS rule allowing affected drywall homeowners who meet specific criteria to take a property/casualty loss deduction for uninsured losses against their federal income tax. Home insurers generally have excluded coverage for drywall-related property damage, citing pollution and construction-defect policy exclusions.

Grand opening of IBHS Research Center held October 19:

IBHS’s new state-of-the-art, multi-risk Research Center in South Carolina had its grand opening on Tuesday, October 19. Download video (small/web) (large/broadcast ) from the test demonstration, as well as several photographs. IBHS was live on The Today Show during the 7 a.m. hour, as well as live on the Weather Channel throughout the day with Jim Cantore, and FOX News Channel also broadcast live from the lab on and off all day through their evening news program. In addition, there was an article in the Wall Street Journal and USA Today. The Associated Press was also in attendance and the story has been picked up all over the country. In total, there were more than 30 media outlets represented. The coverage continued the morning of October 20, when a satellite media tour was conducted featuring interviews with IBHS President and CEO Julie Rochman, SVP of Research, Chief Engineer Dr. Tim Reinhold, and Director of Research Dr. Anne Cope. The tour was mainly aimed at television and radio stations in the western region of the country that were unable to travel to the Research Center. In addition, I.I.I.’s Lynne McChristian was interviewed by the local Fox channel on the insurance implications of having the Research Center.

The Democratic, Republican and Libertarian candidates cite different priorities; hold different positions on issues including credit scoring, caps on malpractice awards and emergency response fees; and have their own views on the roles of the state government, independent insurance agents and money in politics, according to this exclusive survey by Insurance Journal.

A new insurance study by the RAND Corp. “Residential Insurance on the U.S. Gulf Coast in the Aftermath of Hurricane Katrina, a Framework for Evaluating Potential Reform” was presented at a forum on October 20 at the University of Southern Mississippi’s Gulf Park Campus in Long Beach, Sun Herald’s Anita Lee reported. A panel discussion followed featuring congressmen Gene Taylor of Mississippi and Steve Scalise of Louisiana; Lenwood Brooks, legislative assistant to Mississippi Sen. Roger Wicker; Lloyd Dixon, senior economist at RAND; Dave Treutel, the new state wind pool board member, National Flood Insurance Program Advisory Council member and independent insurance agent; and Jim McDonald, independent insurance consultant and RAND contributor. The forum—called “What’s Wrong with the Insurance Market Along the Gulf Coast and How Do We Fix It?”—was sponsored by the Gulf Coast Business Council and USM Gulf Coast. 

New York Times prepping piece on auto insurance and credit-based insurance scores:

Ken Belson (belson@nytimes.com; 212-556-7237) is looking at whether auto insurers have changed the way they use credit-based insurance scores, and whether the percentage of uninsured motorists on the roads has increased. He is writing the story based on the Consumer Reports piece that came out a few weeks ago showing that only 14 percent of 4,500 Consumer Reports subscribers who compared premiums found that they would save money by switching insurers. 

Jeremy Simon (Jeremy@creditcards.com; 512-996-8663 xt. 113) of CreditCards.com, the Internet’s leading consumer-oriented card comparison site offering objective articles and tools that enable consumers to make informed decisions about credit cards, is doing a piece on credit-based insurance scores: what information is included; how insurance scores impact insurance rates; how long insurance scores have been in use; and approximately how many insurers use them.

This senior producer for the program What Would You Do? is looking to speak to someone who is an expert on how cars are stolen. It could be the whole car or part of it. She needs to speak to someone this week as the whole segment must be shot fairly soon. She can be reached at 212-456-2064.

This Old House planning piece on homeowners insurance:

This Old House’s Deborah Baldwin (Deborah_Baldwin@timeinc.com) is looking at what is and is not covered under a homeowners policy.  

Houston Chronicle cites insurance as a good career move:

Rebecca Maitland (ladymaitland@msn.com; cell: 832-752-9645) is doing a piece for the career section on insurance, which will be the cover story of the section on October 31. Every Sunday, the career section highlights an industry.

Lauren Tara LaCapra returns to AP as reporter for Money & Markets:

Lauren comes to the organization from TheStreet.com, where she served as a personal finance and banking reporter. She previously worked for the AP as an airlines and energy reporter until April 2008. Prior to that, she was a reporter for the Wall Street Journal.

Helmed by best-selling author Terry Savage, who also writes a nationally syndicated personal finance column,SavageMoney also provides news and information on the financial industry.

Beth Kobliner, who wrote the book, Get a Financial Life and is seen on PBS, ABC and Fox, has been appointed to the President’s Advisory Council on Financial Capability, a committee charged with tackling the problem of financial illiteracy in our country. The bipartisan council will report to President Obama on concrete ways to help Americans make sensible economic decisions in their everyday lives. The I.I.I. has reached out to Beth to see if we can provide content and other information into her latest foray. 

Business Insurance editor moves on, Insurance Journal reports:

Regis J. Coccia, who has more than 20 years of experience in journalism, has been hired by Aon as its director of marketing and communications, according to this Insurance Journal article. He joins Aon on November 1. In the newly created role, Coccia will support Aon’s corporate marketing and communications teams on projects across the company’s business units with responsibilities including strategic development of client focused communications and thought leadership. For the past seven years Coccia has been editor of Business Insurance, which is published by Crain Communications Inc.