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. submits op-ed to National Underwriter regarding homeowners policy form language, regulatory oversight:
The editorial was in response to a University of Minnesota law school professor’s presentation to the National Association of Insurance Commissioners (NAIC), which asserted that homeowners insurance policies cover fewer perils today than they have in the past, and that many state regulators have turned a blind eye to these changes. The I.I.I. pointed out that over time, homeowners insurance policies have generally expanded the level of coverage they offer, and that insurance is one of the most heavily regulated businesses in the U.S. The editorial, if published, will likely appear as a Final Say column in National Underwriter’s P/C magazine.Front page story in Wall Street Journal says ‘shift to wealthier clientele puts life insurers in a bind’:
This lengthy Monday, October 4, WSJ article (subscription required) examined the tax advantages currently extended to life insurers and the wealthier policyholders who buy either their whole or universal life policies. “High-end policies for $2 million and up, which can carry annual premiums of $20,000 or more, made up nearly 40% of the face value of new whole-life and universal-life policies sold in 2007, according to an analysis done for The Wall Street Journal by Limra, an industry-funded research group. Such large policies accounted for just 10% [of total face value] a decade earlier, and 1% two decades ago,” the article stated.I.I.I.’s chief economist assesses the state of the U.S. life insurance industry; finds that annuities now provide majority of industry profits:
Dr. Steven Weisbart’s 48-slide presentation also shows income, net profits and return on equity for life insurers versus financial firms and other key industries. Other sections deal with revenues and revenue drivers, expenses and general U.S. and insurance industry employment trends. In his remarks to Alabama’s I-Day on Thursday, September 30, Dr. Weisbart also discussed how older generations might boost economic growth and the purchase of life and annuity products by prolonging their working lives. The report concludes with a discussion of the industry’s financial strength, noting that it has weathered the recent recession well.State Farm study finds number of deer-vehicle collisions has grown 21 percent in past five years:
State Farm’s findings were distributed in this Monday, October 4, news release.Toyota says 65 percent of its recall repairs have been completed:
Toyota said on Monday, October 4, that the rate of complaints of sudden acceleration have declined 80 percent since April 2010 and that 3.7 million of the 6 million vehicles covered by its two largest recalls in the U.S. had been repaired. The repaired vehicles represent 65 percent of the recalls made in November 2009 and January 2010, which totaled approximately 5 million vehicles, according to this Tuesday, October 5, New York Times article. More than 80 percent of the 2.3 million vehicles recalled to correct accelerator pedals that could stick have been repaired as well as 58 percent of the 5.4 million vehicles recalled because of a problem that could cause the pedal to be trapped under the floor mat. According to statistics from the National Highway Traffic Safety Administration, 72 percent of repairs are completed within 18 months of an average recall.J.D. Power and Associates study finds homeowners insurers’ overall customer satisfaction rating is near a five-year low:
Details on the market research firm’s methodology and company-specific rankings are in this Tuesday, October 5, news release.
Auto insurers pleased with NAIC’s decision to scale back its proposed data call:
“State regulators are scaling back a planned survey about the impact of credit scores, education levels and occupations on rates insurers charge individual policy holders, amid insurer complaints about the cost and comparability of the data being sought,” according to a Wednesday, October 6, Wall Street Journal (subscription required) article, which was pegged to the aftermath of a Thursday, September 30, National Association of Insurance Commissioners public hearing on the issue.U.S. Transportation Department’s tougher car safety standards make it more difficult for 2011 models to achieve five-star ratings:
So far, only two of the 33 models for 2011 that the U.S. government has tested (BMW AG’s 5 Series and Hyundai Motor Co.’s Sonata) have received five-star ratings under the new, more rigorous system for evaluating car safety, according to this Wednesday, October 6, Wall Street Journal article (subscription required). The ratings will also, for the first time, let consumers know which models are equipped with such accident prevention features as electronic stability control. The federal government plans to use the new system to test approximately 55 vehicles from the 2011 model year.Hartford Courant examines insurance industry’s reaction to active 2010 U.S. hurricane season that inflicted little damage:
The I.I.I.’s Bob Hartwig is quoted in this article, which appeared on Thursday, October 7, in the Hartford Courant. The I.I.I.’s Mike Barry made mention of the story being in the works during our Wednesday, October 6, media call. Forecasters correctly predicted an active Atlantic hurricane season but most of the storms that developed in 2010 did not reach the U.S. coastline. Since the season began on June 1, only two of the 15 named storms, Bonnie and Julia, have made landfall in the U.S. and neither resulted in catastrophic damage, the article states. The National Hurricane Center predicted 14 to 20 named storms for this year, including eight to 12 hurricanes, with four to six major hurricanes of category 3 or stronger. Fifteen named storms and seven hurricanes appeared in the Atlantic as of Wednesday, October 6, with five having developed into major hurricanes, the Courant reports.
Random House to release book this month on the rise and fall of Mississippi trial attorney Dickie Scruggs:
Curtis Wilkie’s The Fall of the House of Zeus: The Rise and Ruin of America’s Most Powerful Trial Lawyer is coming out on Tuesday, October 19. Wilkie, a former Boston Globe reporter, teaches journalism at the University of Mississippi and is a fellow at the Overby Center for Southern Journalism and Politics. The author could make some news when promoting his book in Washington, D.C. (Tuesday, October 26) and New Orleans (Tuesday, November 9). Wilkie will be appearing in Jackson, Mississippi, on Thursday, October 21.
Washington Post editorial board favors voter approval of imposition of ambulance fees in Maryland county:
“Montgomery County [Maryland] residents will see no difference when they call for an ambulance. Insurance companies would cover most of the cost (in the case of those with policies) and the county would pick up the rest, including any co-pays, deductibles and charges for uninsured residents. Neither insured nor uninsured county residents would receive a bill,” the Washington Post’s Monday, October 4, editorial states. Insured non-residents who call 911—those who work but do not live in the county, for instance—might face co-pays or deductibles from their insurance company, depending on their coverage. The only group billed directly for each ambulance run, which is estimated to cost anywhere from $300 to $800, would be uninsured non-residents, and their bills would include application forms permitting people with modest incomes—up to three times the federal poverty level—to waive the fee, according to the Post editorial.
Tennessee county fire department refuses to extinguish fire because the trailer home’s owner had not paid the county’s $75 fire subscription fee:
Media outlets nationwide chronicled the South Fulton, Tennessee, Fire Department’s decision to let Gene Cranick’s trailer home burn to the ground because Cranick had not paid the $75 subscription fee to South Fulton for fire services, a levy assessed against the owners of structures situated outside of South Fulton’s city limits. The incident was the lead story on the Thursday, September 29, broadcast of the NBC affiliate in Paducah, Kentucky, because Cranick’s home was on the Tennessee-Kentucky border.South Florida Sun-Sentinel finds that changes to Florida state law may reduce or revoke hurricane mitigation insurance discounts:
While many Florida homeowners have spent thousands of dollars strengthening their homes against hurricane damage to get insurance discounts, some of them are feeling the impact of changes to state laws that reduce or revoke many of those discounts, according to reporter Julie Patel’s Friday, October 1, article in the South Florida Sun-Sentinel. Insurers granted the discounts, but soon found that premiums were not keeping up with costs, partly because of the large discounts, Patel writes. Under a new Florida law, it is a crime for home inspectors to provide false information about upgrades and inspectors are required to include photographs of each qualifying upgrade and the signature of a licensed engineer, architect or contractor verifying its accuracy. In addition, some insurers have started going back to verify the legitimacy of earlier discounts.
Quiet hurricane season boosted North Carolina Beach Plan’s surplus to $700 million from $625 million:
The boost in the North Carolina Beach Plan’s surplus came as the cumulative value of the plan’s coastal exposure dropped to $69 billion from $76 billion, as of June 30, 2010, according to this Wednesday, October 6, Richmond County (NC) Daily Journal article, which was pegged to North Carolina Governor Bev Perdue’s Sunday, October 3, visit to Windsor, North Carolina, site of recent severe flooding. The story also notes that NC state Senator Marc Basnight, who represents a few of the communities situated within the Beach Plan’s boundaries, wanted to transfer the plan’s rate-setting powers to a commission, and take it away from North Carolina’s Insurance Commissioner Wayne Goodwin. Goodwin prevailed in the most recent legislative session, and retains control over Beach Plan premium rates, the article notes..
