Report: 18 Percent of Californians Lack Health Insurance

By Kathy Robertson
Sacramento Business Journal

California ranks fifth worst in the nation in terms of the percentage of residents without health insurance, a report released today by the U.S. Census Bureau shows.

With an uninsured rate of 18.8 percent of its population, California trails only Texas (24.6 percent), New Mexico (21.1 percent), Florida (19.6 percent) and Oklahoma (19.5 percent).
Minnesota has the best record, with a rate of 8.7 percent uninsured. The national average is 15.7 percent.

Nationwide, 46.6 million people -- almost 16 percent of the population in the United States -- have no health insurance, according to the report, titled Income, Poverty and Health Insurance in the United States: 2005. That's up by 1.3 million from last year. The number of uninsured children rose to 8.3 million from 7.9 million.

The data came from the Census Bureau's 2006 Annual Social and Economic Supplement to the Current Population Survey.

The number of people covered by employer-sponsored insurance nationwide dropped to 59.5 percent from 59.8 percent.

Last year, premiums for employer-provided health insurance were projected to cost, on average, an extra $922 a year to cover the unpaid expenses of healthcare for the uninsured, according to a report by the health consumer organization Families USA.

From: Sacramento Business Journal (www.bizjournals.com)

Power Rankings Find Auto Insurers Improving

By Daniel Hays
National Underwriter

Overall customer satisfaction with auto insurers has improved for a fourth year, according to J.D. Power Associates, which ranked Amica Insurance tops among auto carriers for a seventh year.

Those were among the findings by the Westlake Village, Calif.-based market information firm in the company’s 2006 National Auto Insurance Study.

The firm’s research also indicated that some insurers are missing a clear opportunity to improve customer satisfaction.

According to the study, on average, customers who have policy needs reviewed each year report satisfaction scores that are nearly 80 index points higher than those who did not. Yet, only one-half of auto insurance customers reported being offered an annual policy review.

“Offering a review at some interval, even if not annually, is better than not at all,” Jeremy Bowler, senior director of insurance practices at J.D. Power and Associates, said in an interview.
Across all insurance companies, if a customer indicates a review was offered in the last year, the average satisfaction is 837 index points on a 1,000 point scale, Mr. Bowler noted.

In cases where there is never any review offered, the satisfaction level drops to 737 points. “Our recommendation is certainly you [the insurer] should be offering these things,” said Mr. Bowler.
J.D. Power noted that unless a customer files a claim, offering to review a policyholder’s insurance needs is one of only a few opportunities an insurer has to build trust with the client, who otherwise would only interact with their carrier by paying their bill and periodically changing their policy to update drivers, vehicles or their address.

The study revealed that among customers who file claims, the way in which the company handles the claim is responsible for 44 percent of the customer’s impression of the insurer.
When policyholders need to contact their insurer, J.D. Power said their satisfaction declines each additional time they have to make contact over the same issue.

On the 1,000 point scale, customers who had their call resolved on the same day had an average satisfaction score of 862, but the score dropped to 816 when it took one-to-three days to resolve the issue, and down to 727 for four days.

Insurers who called back their insureds when they promised were rated 135 points higher than those that did not.

According to the study, auto insurance customers who bundle other policies with the same insurer--such as homeowners insurance--are more likely than non-bundlers to be satisfied with their auto insurer’s policy offerings, and renew their policies at an 11 percent higher rate.

J.D. Power said insureds who understand the discounts they receive are also more likely to be satisfied with policy offerings overall.

Mr. Bowler, in a statement released with the survey, said that, “Carriers achieving high levels of satisfaction retain 90 percent of their customers compared to those carriers with the lowest satisfaction levels, who retain only 78 percent of customers.”

He noted that “every customer lost to a competitor has a real impact on an insurer’s bottom line. However, in many cases, it takes little-to-no investment to improve customer satisfaction.”
The study found while overall customer satisfaction with auto insurers had improved for a fourth consecutive year, the rate of satisfaction had slowed.

Amica--the Lincoln, R.I.-based insurer rated tops in the survey--is 50th among National Underwriter’s ranking of insurers, based on net premium written of $1.4 billion.

The company was followed in the J.D. Power rankings by Erie, State Farm and GEICO, in that order.

The company said San Antonio, Texas-based USAA gets a better score than AMICA, but is not ranked because it is only open to U.S. military personnel and their families.

Among 23 insurers ranked on a bar graph, USAA scored 913 and Amica 871. In dead last--with 740--was American International Group. The industry average was 800.

From: National Underwriter (www.nationalunderwriter.com)

Service Tops Price for Customers of Auto Insurance

By Lavonne Kuykendall
Dow Jones News Service

Drivers who were asked to rate overall satisfaction with their insurance provider gave more weight to customer service than price, according to the most recent J.D. Power & Associates ranking of auto insurers.

The survey asked consumers what they liked and disliked about their insurer, whether they had price-shopped or changed insurers in the past year, and what drove the change.

Customers generally gave higher scores to insurers that allowed them to resolve a claim or other issue with one phone call and insurers that gave them a discount for bundling home and auto insurance into one package, J.D. Power said.

The more phone calls a customer has to make to resolve a problem, the lower the overall score the insurer receives, said Jeremy Bowler, senior director of the insurance practice at J.D. Power. Giving customers a clear picture of any discounts they receive improves satisfaction, as does conducting an annual policy review to make sure coverage is up to date, Mr. Bowler said.

For the fifth year, consumers said they were more satisfied with their insurer, suggesting insurance-company efforts to improve are yielding results, Mr. Bowler said. He said higher satisfaction scores correlated to higher loyalty, with insurers ranked near the bottom more likely to see customers shopping around for a better deal.

The top scorer in the survey was Amica Mutual, which has slightly less than 1% of the auto-insurance market, but has led the survey since it was launched seven years ago. Amica's score of 871 out of a possible 1,000 points beat second-place insurer Erie Indemnity Co., which scored 825, and third-place finisher State Farm Mutual Automobile Insurance Co., the country's largest auto insurer, with 823.

Rounding out the top five were the Geico unit of Berkshire Hathaway Inc., the fourth-largest insurer nationwide and the only public company in the top five, and American Family Insurance, which tied with a score of 803.

Mr. Bowler said 22% of the 14,066 respondents said they price-shopped for a new provider last year, but only 9% actually made a change. There were many reasons why a customer would shop, Mr. Bowler said, including advertising or unhappiness with price. The most likely to actually switch are those who had a service problem rather than a price concern, Mr. Bowler said.

From: Dow Jones News Service (www.dowjones.com)

Handheld Hazard: Phoning and Driving Don't Mix

Los Angeles Daily News Editorial

Those who are opposed to proposed legislation banning driving while holding a cell phone say the bill can't do anything about the larger problem of inattentive drivers. Well, no, it can't. Until they invent a gizmo that can force people to pay attention in safety-challenged situations, nothing can stop that.

But that's not a sound argument against a bill that would ban California motorists from using handheld cell phones while driving. Everyone with a working set of eyes can see that when drivers use handheld cell phones - as opposed to one of the various technologies that allows them to talk hands-free - their driving skills suffer. Sometimes to fatal effect.

According to Sen. Joe Simitian, D-Palo Alto, it's even worse than that: Handheld cell phones are the No. 1 distraction that leads to car crashes.

If that's true, it's good enough reason to push drivers toward one of the many, and reasonably priced, hands-free options available. Most people can purchase an ear bud for their cell phone for less than the cost of one tank of gas.

This bill is really just a nudge to civilized behavior. No one's car will be impounded for using a handheld cell phone. The first infraction is a $20 fine, and motorists are exempted in cases of an emergency.

Besides, with rising popularity of the wireless cell phone ear-bud technology, by the time this legislation takes effect, on Jan. 1, 2008, there might be few handheld phones left to regulate. If a ban propels that ongoing trend, all the better.

Southern California drivers have enough to worry about negotiating the congested freeways and roads. State legislators ought to endorse SB 1613, and Gov. Arnold Schwarzenegger ought to make good on his promise to sign it into law.

Then, maybe we can talk about those TV screens so popular in cars now.

From: Los Angeles Daily News (www.dailynews.com)

Child Drownings Believed High Among Immigrants

Statistics indicate a disproportionately high rate of drowning among children from immigrant families in Washington state and cultural differences are likely involved, according to a Children's Hospital researcher.

The review of drownings last year found drowning rates were generally higher among nonwhite children than for white children, a pattern also found in national statistics.

For example, Asian children 17 and younger accounted for 6.9 percent of the state's population and 18.4 percent of the unexplained drowning deaths among children in that age group between 1999 and 2001.

Although the study did not specifically identify drowning victims by ethnic background, lead researcher Linda Quan and public health officials said the names indicated most of the minority child victims were from immigrant families.

While the reasons remain unclear, Quan and some Ethiopian and Vietnamese parents who met with her recently at the West Seattle public pool cited cultural differences in their countries of origin, including an absence of formal swimming lessons and low rates of adult proficiency in swimming.

"What was really eye-opening was that the experience people have in the prior country affects how they deal with a new activity in a new country," Quan said. "If people didn't have an organized approach to swimming or safety, they come without the background of knowing what safe behavior is around water."

Nonnative parents are often less likely than native-born citizens to insist on having their children learn to swim, Quan and other researchers said.

"In a lot of countries, swimming isn't thought of as a recreation. It's for work, like fishing. Lives are more about making money to survive," said Diane Jones, co-coordinator of the West Seattle pool, "but here in the Northwest, water is so much of a part of our recreation -- sailing, kayaking."

Lam Ha, watching children get instruction from a swimming coach, said he never learned to swim while growing up as the son of a couple that owned a grocery store in Saigon, now Ho Chi Minh City.

"In Vietnam, if you want to learn how to swim like this, you have to be a rich person," Ha said.

To help inform such parents of free swimming lessons for third- and fourth-graders, the city's Parks and Recreation Department prints brochures for the program in 12 languages.

Muluka Ali, an immigrant from Ethiopia, said that in villages she remembered, children learned to swim informally from older siblings or others, mostly in lakes and rivers without lifeguards or other protections.

Now, concerned for the safety of her children Bowna, 10, Sartu, 8, and Ridwan, 5, she said, "I want them to learn everything and take care of themselves."

Teenagers have cited the problem of peer pressure, Quan said, describing them as saying, "Even if we don't swim or swim well (and) our friends are going swimming, we're going to go just to be with them."

Some of those teens said they considered drowning a matter of fate, Quan said.

Source: Associated Press (www.ap.org)

From: Claims Guides (www.claimsguides.com)

California Lawmakers Enter Final Days of 2005-06 Session

California lawmakers on Monday will begin the final days of the 2005-2006 legislative session, which ends midnight Aug. 31. The following, by Sam Sorich, president of the Association of California Insurance Companies, is a summary of the bills awaiting action in the Assembly and Senate, measures sent to the governor last week and legislation recently signed into law by the governor.

Bills Awaiting Action by the Full Assembly
SB 815 (Perata) Workers Compensation. SB 815 would increase permanent partial disability benefits for workers compensation claimants. ACIC opposes the bill.

SB 1489 (Ducheny) Attorney's Fees: Attorney General. SB 1489 would force companies that are sued by the attorney general to pay all investigation and prosecution costs whenever the attorney general "prevails." ACIC opposes the bill.

SB 1542 (Migden) Motor Vehicles: Key Information Access. SB 1542 would require an auto manufacturer to provide a system that gives the registered vehicle owner information necessary to reproduce the vehicle's key to allow the owner to enter, start and operate the vehicle. ACIC supports the bill.

AB 2942 (Koretz) Workers Compensation: Inpatient Burn. AB 2942 would require the administrative director of the Division of Workers Compensation to review the reimbursement rates for some inpatient burn diagnostic groups to ensure that the rates are commensurate with the cost of inpatient burn treatment. ACIC opposes the bill.

Bills Awaiting Action by Full Senate
AB 1302 (J. Horton) State Agency Regulations. AB 1302 would extend to all state agencies the requirement currently applicable to the Department of Insurance that interested parties be advised at least five working days prior to submission of an emergency regulation to the Office of Administrative Law. ACIC supports the bill.

AB 1612 (Pavley) Workers Compensation: Network. AB 1612 would require a contracting agent to remove a medical care provider from a medical provider network at the provider's request.
ACIC opposes the bill.

AB 2125 (Vargas) Insurance. AB 2125 is the Department of Insurance's "omnibus" bill which addresses a number of regulatory issues. Recent amendments to the bill clarify the insurance commissioner's regulatory authority over the State Compensation Insurance Fund. ACIC supports the bill.

AB 2287 (Chu) Workers Compensation: Acupuncture. AB 2287 would authorize special workers compensation treatment guidelines for acupuncture. ACIC opposes the bill.

AB 2831 (Ridley-Thomas) Insurance, Income, and Corporation Tax Credits: CDFI. AB 2831 would extend the sunset date for certain tax credits on qualified investments made by insurers to community development financial institutions from Jan. 1, 2007, to Jan. 1, 2017. ACIC supports the bill.

Bills Passed and Sent to Governor
AB 1122 (Wyland) Auto Insurance: Cost Estimate. AB 1122 would authorize an insurer that has paid a total loss settlement and that is unable to obtain a certificate of ownership under certain circumstances to request DMV to issue a salvage certificate for the vehicle. This would enable insurers to dispose of such vehicles. ACIC supports the bill.

AB 2400 (Benoit) Reinsurance. AB 2400 would (1) recognize the right of reinsurers to offsets in liquidation proceedings, (2) strengthen regulation of reinsurance intermediaries and (3) allow issuance of syndicated letters of credit for reinsurance security. ACIC supports the bill.

AB 2815 (Bogh) Service Contracts: Definitions. AB 2815 would authorize the insurance commissioner to approve vehicle service contracts when the company issuing the contract maintains a ratio of direct written premiums to surplus of not more than 3 to 1. ACIC supports the bill.

Bills Signed into Law by the Governor
AB 1946 (Nava) Residential Property Insurance. AB 1946 will clarify existing law that requires homeowners insurers to provide copies of the Residential Property Insurance disclosure statement to policyholders and will clarify when the Coverage A disclosure may be required. ACIC is the sponsor of the bill.

AB 2292 (Montanez) Workers Compensation: Death Benefits. AB 2292 will clarify the process for determining when workers compensation death benefits should be paid to the state in cases where the deceased employee has no dependants or heirs. ACIC supports the bill.

AB 2407 (Salinas) Vehicles: Mature Driver Program. AB 2407 will provide that a mature driver may renew his or her safe-driving certificate by completing a driver-improvement course with 240 minutes of instruction rather than the 400 minutes required under current law. ACIC supports the bill.

AB 3072 (Assembly Insurance Committee) Insurance Guarantee Association. AB 3072 will extend the date for the issuance of bonds by the California Insurance Guarantee Association from Jan. 1, 2007, to Jan. 1, 2009. ACIC supports the bill.

SB 1462 (Cox) Insurance Information and Privacy Protection: Service of Process. SB 1462 will allow the insurance commissioner to use a third-party vendor with tracking capability to notify an insurance-support organization that the commissioner has received service of process on behalf of the insurance-support organization. ACIC is the sponsor of the bill.

The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California.

Source: Association of California Insurance Companies (www.acic-1.org)

From: Insurance Journal (www.insurancejournal.com)

Calif. Auto Regs May Cut Uninsured Motorists, Agents Say

An agent group reacting to the dispute over new California auto insurance regulations said they are hopeful the new rules encourage more uninsured motorists to get coverage.

The Latin American Agents Association, based in El Monte, Calif., also said it believed insurers, consumer groups and the state insurance department should wait and see which way the market is impacted by the change, before "more darts are thrown--or backs are patted."

Insurer trade groups have sued to overturn the rules promulgated by Insurance Commissioner John Garamendi, which requires them, when setting individual driver rates, to deemphasize the weight they give to where the motorist is domiciled.

LAAA said it is hopeful that given carrier announcements of rate decreases and the publicity over the new regulations, “more uninsured drivers will rethink their decision to ignore California’s compulsory insurance laws and do the right thing, for themselves, their families and communities."

An initial effort by insurers to secure an injunction before their suit is heard was unsuccessful, and last week the new rules went into effect. Insurers contend the impact of the regulation is to make rural drivers subsidize those in urban locations.

Since the new rules were released, four insurers have announced they were cutting rates for drivers.

The LAAA said it is "anxiously waiting" to see whether the new rules actually subsidize premiums of urban and inner-city drivers, or if drivers get premium relief that "consumer groups and the California Department of Insurance believe has been owed to drivers since the passage of Proposition 103 [the insurance reform voter initiative] nearly two decades ago."

“As our membership is comprised largely of producers doing business in larger metropolitan areas, as well as in communities with a high percentage of Latino residents, we have long held that the less weight given to ZIP codes in determining premiums, the better it will be for our customers," the LAAA said.

The group said further it does not believe that premium reductions should be held to a “zero-sum” standard.

"The across-the-board rate reductions by USAA and the Automobile Club of Southern California, as well as the recent rate request by State Farm--which would lower premiums for most of its policyholders by 8 percent--seem to bode well for all California drivers," the group said.

“Because the areas in which LAAA members do business historically have high uninsured motorist rates, our association is especially pleased to see a decrease in premiums,” the group added. "In some cases, drivers automatically assume they will pay high insurance rates because of where they live, and do not even consider getting coverage."

The LAAA said it is "encouraged by what has happened in a short time, in relation to new rates.”

“As insurance agents and brokers, we have a duty to provide our communities access to affordable insurance products,” the group said. “Although it is still too soon to tell, it appears that the new regulations will prove to be a help to us, and not a hindrance. Ultimately, if it is good for our customers, it is good for us all.”

From: National Underwriter (www.nationalunderwriter.com)

Latin American Agents Will Wait and See How Auto Regs Affect Customers

The Latin American Agents Association said it will wait and see how insurers react to newly imposed automobile rating regulations in California. After the Superior Court denial, and Appeals Court rejection of the insurer association coalition's request for an injunction blocking implementation of new rate regulations, the Latin American Agents Association (LAAA) released the following statement:

"The LAAA is anxiously waiting to see whether the new limits on territorial weighting will result in suburban and rural drivers 'subsidizing' premiums of urban and inner city drivers, as some groups have claimed, or if drivers across the state will receive premium relief consumer groups and the California Department of Insurance believe has been owed to drivers since the passage of Proposition 103 nearly two decades ago.

"As our membership is comprised largely of producers doing business in larger metropolitan areas, as well as in communities with a high percentage of Latino residents, we have long held that the less weight given to Zip Codes in determining premiums, the better it will be for our customers. However, we do not believe that premium reductions should be held to a 'zero-sum' standard. The across the board rate reductions by USAA and the Automobile Club of Southern California, as well as the recent rate request by State Farm which would lower premiums for most of its policyholders by 8 percent, seem to bode well for all California drivers.

"Because the areas in which LAAA members do business historically have high uninsured motorist rates, our association is especially pleased to see a decrease in premiums. In some cases, drivers automatically assume they will pay high insurance rates because of where they live, and do not even consider getting coverage. With the publicity generated over the new rate regulations de-emphasizing Zip Codes, the LAAA is hopeful more uninsured drivers will rethink their decision to ignore California's compulsory insurance laws and do the right thing, for themselves, their families and communities.

"Whichever side of the debate you sided with, the fact is that the new regulations are now the law of the land, barring any decision to appeal to the California Supreme Court. Before any more darts are thrown -- or backs are patted -- we believe the industry, consumer groups and the CDI should wait and see how the insurance market is impacted, positively or negatively. The LAAA is encouraged by what has happened in a short time, in relation to new rates.

"As insurance agents and brokers, we have a duty to provide our communities access to affordable insurance products. Although it is still too soon to tell, it appears that the new regulations will prove to be a help to us, and not a hindrance. Ultimately, if it is good for our customers, it is good for us all."

From: Insurance Journal (www.insurancejournal.com)

Latin Americans in the U.S.A. Distrust Government Institutions

A great part of the Hispanic population that lives in the United States expresses an attitude of significant distrust towards the political, judicial, police and other institutions.

"We are observing a very interesting phenomenon in which the Latinos in the United States seem to drag that mistrust towards the democratic institutions so characteristic of our countries ", said Eduardo Gamarra, director of the Center for Latin America and the Caribbean from the Florida International University (FIU).

The expert mentioned the results of a recent survey held amongst the Hispanic population in the United States by New link Research, which showed that only 17% of the surveyed have confidence in the political parties, 37 % in Congress and the justice system and 39% in the police.

In contrast, the educative institutions (83%), the church (78 %) and the banks (73%) enjoy the highest levels of Latinos confidence.

"These results are very similar to that obtained in Latin American countries, which seems to indicate that Latinos that arrive at the United States don’t integrate fully to the country’s political life," affirmed Gamarra.

The academic, related these results to the thesis presented by the controversial investigator Samuel Huntington, from Harvard University according to which, the Latin immigrants resist to assimilate the American culture and learn the English language, forming enclaves in the great cities and threatening with the creation of a country divided in two cultures and two languages.

"In a certain sense, Professor Huntington would seem to be correct, of course his conclusions are extreme and ignore the great contributions that Latinos continuously make to this country", indicated Gamarra.

From: Dominican Today (www.dominicantoday.com)

State Farm ‘Outraged’ By ABC Fakery Report

State Farm has expressed outrage after ABC reported the insurer altered engineering reports on hurricane damage in order to deny homeowners’ claims.

“State Farm is outraged by a misleading story aired on Friday evening's ABC 20/20 program and by depictions made by two external independent claims adjusters, Cori Rigsby Moran and Kerri Rigsby,” the company said.

The story mischaracterizes State Farm's claims handling process in the aftermath of Hurricane Katrina, the Bloomington, Ill., company said in a statement.

ABC reported that the engineering reports were altered to avoid paying claims. "How the program characterized State Farm's claims handling is grossly unfair," said Susan Q. Hood, claims vice president, State Farm Insurance.

Ms. Hood said State Farm sought engineering reports in less than 2 percent of the more than 84,700 Mississippi property claims and issued payments on more than 60 percent of those claims in which engineers were involved.

“And in the claims where engineers were involved, we paid far more on homeowner claims than we did on National Flood Insurance Program claims,” she said.

In the segment, ABC's Brian Ross discussed documents supplied by the two adjusters with attorney Wayne Drinkwater, who represents State Farm in Mississippi, saying the documents demonstrated that there were conflicting engineering reports and that State Farm denied claims.

State Farm said it has tried to meet with the two women adjusters who appeared in the ABC 20/20 segment to discuss their concerns. They have refused to do so, despite repeated requests.

The women are represented by Mississippi attorney Richard Scruggs, whose firm voiced accusations of altered engineering reports several months ago.

From: National Underwriter (www.nationalunderwriter.com)

Flood Coverage? 1 in 4 Homeowners Clueless

On the first anniversary of Hurricane Katrina, a new survey of homeowners finds that more than a quarter of them are not clear if they have flood coverage, while more than a third are uncertain what their insurance covers for hurricane damage.

The poll findings were released today by Hartford, Conn.,-based Travelers, of St. Paul Travelers Companies Inc. The survey was conducted by Harris Interactive.

According to the "Travelers In-synch Homeowners Insurance Study," the research data also showed that:

• A little over one in four (27 percent) are not sure whether their policy will cover the replacement cost of rebuilding if the home is damaged.

• At least one-quarter (26 percent) report they are unsure whether damage caused by natural disasters is covered under their policy.

• Over one-third (36 percent) are unsure whether their policy will cover damage caused by a hurricane.

• Over four in ten (42 percent) are uncertain about earthquake coverage.

• One-quarter (26 percent) are unsure about flood damage.

• More than one-third (37 percent) are not sure whether their policy will cover hotel stays if their home is damaged.

The online poll—taken between May 30 and June 1—obtained responses from more than 1,300 adults ages 18 and older who currently own the home in which they are living.

Joseph P. Lacher Jr., executive vice president of Travelers Personal Insurance, said his company is encouraging people to talk to an independent agent to get more information about their coverage and to discuss their changing needs.

“It's all about managing risks, and keeping your insurance in-synch with your risks to put you in greater control," said Mr. Lacher.

The survey also asked how often homeowners reviewed their policy to ensure that it remained in-synch with their needs, and the ways in which they conducted that review. Travelers said the results suggested that more than four in ten (44 percent) homeowners had not revisited their insurance coverage in the past year—some not in the last 10 years.

"It's not at all unusual for homeowners to get insurance coverage when they buy a house, but not revisit it for years," said Mr. Lacher.

He noted the factors that impact coverage over the year include remodeling, installation of burglar alarms, major and minor purchases.

Travelers said the survey also reaffirmed the value of working with an insurance agent to make sure that coverage types and levels are where they should be. Two-thirds (66 percent) of those who last reviewed their policies with an agent strongly agreed that their current coverage was, in fact, in-synch with their needs.

The company said that to help homeowners identify common risks, it is offering the "In-synch Challenge," a fun and informative interactive game on http://www.travelers.com that provides important risk mitigation information to consumers.

Online visitors are asked to tour homes and businesses and to solve a series of common problems related to risks or exposures that policyholders typically overlook.

As an example, Travelers said, one game asks participants to correctly place smoke detectors inside a home. Another challenges participants' understanding of high-worth items that can be found in the average living room. A third asks small-business owners to spot areas where slip-and-falls might occur.

Mr. Lacher said the company is focused on getting the message out that, "The Travelers brand is about helping consumers make the best decisions based on the risks -- known and unknown.”

Travelers said the survey is not based on a probability sample, and therefore no theoretical sampling error can be calculated. The carrier said score weighting was used to adjust for respondents' propensity to be online.

From: National Underwriter (www.nationalunderwriter.com)

California Assembly Passes Bill to Provide Universal Health Care

The Assembly narrowly approved a bill Monday that would provide health insurance to all residents, a move that would make California the only state to offer government-operated universal health care.

The bill, which passed the 80-member house on a largely party-line vote of 43-30, received strong Democratic backing. But supporters say pressure from the insurance industry and Republican lawmakers is likely to doom the measure when it reaches Gov. Arnold Schwarzenegger.

The governor's office has declined to take a position on the bill, but Schwarzenegger in the past has voiced his opposition to single-payer systems.

The bill by Sen. Sheila Kuehl, D-Santa Monica, must be approved by the state Senate before it heads to the governor's desk. It would provide every California resident with health insurance through a system controlled by a newly created entity called the California Health Insurance Agency.

The agency would be under the control of a health insurance commissioner appointed by the governor.

In April, Massachusetts passed a law requiring all residents to buy health insurance or face legal penalties, essentially treating health care the same way it does auto insurance.

"The health care system today is teetering on collapse," said Assembly Speaker Fabian Nunez, D-Los Angeles.

Providing universal health care, he said, "would help California take leadership at a national level."

Assembly Republicans voiced strong concerns over the bill, calling it "socialized medicine" and "doomed to failure." They compared the proposed state insurance agency to "bloated bureaucracies" such as the Department of Motor Vehicles and the Internal Revenue Service.

Many Republicans said they supported the idea of universal health care but said a single-payer system is not the way to accomplish it.

"This government-run health care scheme will jeopardize the quality care that Californians have come to expect and drive businesses out of our state," said Assemblyman Greg Aghazarian, R-Stockton.

"The reason health care is messed up is the government," argued Assemblyman Ray Haynes, R-Murrieta. "So why would we want to create even more government?"

The bill's proponents took issue with the Republicans' claim that it is synonymous with "big government."

What (the bill) is not is 'government-run health care,'" Kuehl said during a news conference before Monday's vote. "All providers remain as they are, private or public, but they would actually get a chance to treat patients as they think best."

The bill passed the Senate by a straight party-line vote of 25-15 in May 2005. Monday's action in the Assembly returns it to the Senate for a final vote on amendments. The bill is expected to reach Schwarzenegger's desk by Sept. 1.

During an appearance in July at San Francisco's Commonwealth Club, Schwarzenegger said, "I don't believe in universal health care.

"I don't believe that government should be getting in there and should start running a health care system that is kind of done and worked on by government," he said.

Under Kuehl's bill, the state's health care overhaul would be partially financed by converting existing governmental programs to the new system, while the rest would come from consumers and their employers in place of private insurance.

All told, the state would save nearly $8 billion in the first year, according to an analysis by the independent Lewin Group that was commissioned by the bill's supporters.

The report found that consolidating the health care system into a single plan would significantly reduce administrative costs, a finding the bill's proponents seized upon when arguing in its favor.

Under the measure, "the billions of dollars now wasted on insurance middlemen, CEO pay, record corporate profits, overhead and advertising will be used to provide good, affordable care for all who need it," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, a consumer advocacy group based in Santa Monica.

Although the bill's fate is uncertain, supporters said the Assembly's action marked a turning point in the fight for universal health care.

"Today's vote shows momentum and a sense of inevitability that this policy will be the law of California, whether in the next month or after the next ballot," Flanagan said.

Source: Associated Press (www.ap.org)

From: San Jose Mercury News (www.mercurynews.com)

Another Federal Laptop Stolen: Motor Carrier Licenses May Be At Risk

A laptop that might contain personally identifiable information on 193 people who have commercial driver's licenses was stolen in Baltimore this week, transportation officials said Friday.

The Federal Motor Carrier Safety Administration, part of the Department of Transportation, said a the laptop was stolen Tuesday from a government-owned vehicle and was reported to Baltimore police.

FMCSA said the computer might contain names, dates of birth and commercial driver's license numbers of 193 people from 40 motor carrier companies. It does not contain financial or medical information, the agency said.

The motor carriers have been notified of the potential security breach the FMCSA said.

The states that issued the commercial driver's licenses are Alabama, California, Florida, Georgia, Illinois, Kentucky, Maryland, North Carolina, New Jersey, New York, Pennsylvania, Texas and Virginia and Washington, D.C.

FMCSA urged drivers to contact their employers for more information, or call the agency's hot line: 1-800-832-5660.

This is the latest in a series of thefts of government laptop computers that contain sensitive data:

In May, a laptop containing the names, Social Security numbers and birth dates of veterans discharged since 1975 was stolen from the Aspen Hill home of a Veterans Affairs employee.

Last month, the Transportation Department inspector general's office said that one of its laptop computers containing names, birth dates and Social Security numbers for 132,955 Florida residents was stolen from a government vehicle in suburban Miami.

Two laptop computers with personal information on about 31,000 Navy recruiters and their prospective recruits were stolen from Navy offices in New Jersey in June and July.

Source: Associated Press (www.ap.org)

From: Insurance Journal (www.insurancejournal.com)

Insurers Feeling the Heat of Climate-Change Losses

By Chris Rauber
San Francisco Business Times

Global warming is making things increasingly uncomfortable for the insurance industry.

Some of the world's largest insurance companies and brokerages, including giants such as AIG, Novato-based Fireman's Fund Insurance Co., and the international brokerage Marsh & McLennan, are concluding that climate change is not just a scientific fact. It's a business reality that must be faced, dealt with, mitigated -- and perhaps even profited from.

That's the main message of a report released this week by Boston-based Ceres, an investor and environmental coalition that includes large institutional investors and other organizations, including Pacific Gas & Electric Co., Bank of America, the Sierra Club, Catholic Healthcare West and Berkeley nutrition bar maker Clif Bar.

The insurance industry, which as recently as two years ago paid scant attention to climate change, was jolted into action by catastrophic insured losses in 2004 and 2005, according to the report. It said those losses totaled a record $75 billion, including $45 billion from Hurricane Katrina.

The report -- co-written by Lawrence Berkeley National Laboratory scientist Evan Mills, and industry veteran Eugene Lecomte -- said climate change ultimately threatens to bankrupt even the largest insurers and government-run insurance programs unless steps are taken to reduce warming trends believed to be linked to carbon-based emissions or greenhouse gases.

On the positive front, the report -- "From Risk to Opportunity: How Insurers Can Proactively and Profitably Manage Climate Change" -- said the insurance industry "is uniquely positioned to further society's understanding of climate change and advance forward-thinking solutions to minimize its impacts."

The report said nearly 200 products or services are offered by insurers or brokers globally, more than half of them in the United States, that attempt to reduce emissions and energy use. They include:

- Fireman's Fund's planned introduction this fall of "green" coverage for commercial buildings that are certified as environmentally friendly and structurally sound or that are rebuilt to those standards after being damaged.

- Hurricane loss prevention efforts, Steps taken by insurer FM Global helped policyholders avoid an estimated $500 million in damages from Katrina, after 500 commercial locations spent just $2.5 million on pre-hurricane protective measures.

- Carbon emission credit guarantees and other renewable energy-related products from Marsh, AIG and other major industry players.

For its part, Fireman's Fund has asked regulators to approve its new "green" coverage, including discounted premiums or rate credits for commercial building owners whose buildings are certified as environmentally appropriate and discounts for green rebuilds or retrofits of damaged structures.

"A building like that is simply better for us to insure," CEO Charles Kavitsky said.

From: San Francisco Business Journal (www.bizjournals.com)

Congress Considers Two Insurance-Regulation Proposals

By Claire Duffett
The Central New York Business Journal

Congress is considering two separate bills that attempt to modernize insurance regulation.

Both proposals seek to address two main issues - unnecessary costs and delays in the new-product approval process.

The first bill will grant the federal government power to regulate insurance. The proposal went to committee July 11.

The bill, sponsored by senators John Sununu (R-N.H.) and Timothy Johnson (D-S.D.), gives insurance companies the option of abiding by yet-to-be-determined federal regulations or sticking with the current state regulatory system, explains Timothy Dodge, director of research at the DeWitt-based industry group the Independent Insurance Agents & Brokers of New York, Inc. (IIABNY).

Bill S5209, called the National Insurance Act of 2006, was introduced in the Senate Banking Committee July 11.

Traditionally, insurance in the United States is regulated exclusively by the states.

Under the act, insurers and producers could elect federal or state regulation, charters, and licenses.

The legislation would allow insurers licensed under the federal system to do business in any state without the need for additional licenses, according to the New York City-based Insurance Information Institute (III).

Under federal law, national insurers would be subject to regulation from the Treasury Department's National Insurance Commission, the III says.

The purpose would be to allow national insurers to register and launch new products less expensively and more easily, Dodge explains.

However, enlisting two governing bodies will only increase bureaucracy, lessen continuity between policies, and confuse the consumer, Dodge argues.

The pro-federal-regulation argument Other insurance professionals and organizations support the legislation, including the American Council of Life Insurers (ACLI), which released a statement endorsing the bill.

"The National Insurance Act of 2006 would provide a streamlined regulatory structure with uniform and consistent laws, regulations and consumer protections," ACLI says. "The need for the optional federal charter has been made abundantly clear during Congressional debates over issues such as data security. Congress has struggled to provide equal protections to insurance consumers in the face of differing state laws on the topic.

"Absent a federal charter, it is unclear how Congress could enact legislation that ensures that consumers in all states are treated equally," the organization adds.

Many of the national carriers support the bill because they believe it will reduce overhead costs of registering new products with every state, Dodge explains.

Sununu and Johnson in a joint statement, argue that the Act will establish a dual system, similar to the "highly successful" banking regulatory bodies. A federal charter will enhance the industry's clarity.

"Streamlining an overwhelming and tangled web of state rules for financial regulation, licensing, policy forms, rates, and market conduct exams under an 'optional federal charter' system will encourage greater competition," Sununu said.

Keeping insurance a state issue

In contrast IIABNY supports the alternative legislation that keeps insurance regulation a state matter but makes regulations more uniform between states.

Michael Oxley (R-Ohio) is sponsoring the State Modernization and Regulatory Transparency (SMART) Act.

The proposal addresses insurance's 15 main regulatory areas including market conduct, licensing, life and health insurance, commercial and personal lines property/casualty insurance, reinsurance, and antifraud data exchanges.

The SMART plan was first introduced in 2004. Since its introduction, it has been considered and rejected several times, and other representatives have introduced similar proposals.

The law requires states to comply with uniform standards in an effort to facilitate new product introduction without the addition of a federal regulatory system, Dodge says.

Dodge and IIABNY cite several reasons for opposing the National Insurance Act and supporting the SMART Act.

First, state insurance regulation provides a level of responsiveness that could not be matched by a federal system because the volume of complaints filed with the federal system would far outweigh the newly established department's ability to process them, Dodge argues.

Second, a dual system would confuse consumers who have problems with a policy. A consumer would have to discern whether his policy was approved through the state or the federal government before he could file a complaint.

Third, IIABNY argues the dual structure would undermine enforcement of insurers' obligation to their customers, Dodge says.

The SMART Act offers a more middleground approach to solving the insurance industry's regulatory problems, he says.

Source: Central New York Business Journal (www.cnybj.com)

From: Insurance News Net (www.insurancenewsnet.com)

Four Governors Ask Congressional Leaders to Move on Immigration Bills

By Mike Sunnucks
Business Journal of Phoenix

Border governors -- including Arizona's Janet Napolitano and California's Arnold Schwarzenegger -- are chastising Republican congressional leaders for dragging their heels on immigration reforms and border security upgrades.

Napolitano, Schwarzenegger and Govs. Bill Richardson of New Mexico and Rick Perry of Texas have written GOP congressional leaders asking them to move forward with stalled immigration measures this year.

The U.S. House and Senate have differing immigration reform measures and conservative House Republicans have been holding field hearings throughout the country to "study" the issue.

Critics, including the governors, moderate Republicans and Democrats, say the field hearings are nothing but a stalling tact aimed at running out this year's clock on immigration.

Perry and Schwarzenegger are Republicans. Richardson and Napolitano are Democrats.

"Instead of holding dozens of field hearings that do little but stir the pot of discontent, we urge you to get back to work and pass legislation that puts the interest of taxpayers first and solves this crisis once and for all," said the governors' letter to House Speaker Dennis Hastert and Senate Majority Leader Bill Frist. "We ask that you pass comprehensive reform and address this critical issue before Congress adjourns for the year."

It is looking unlikely that Congress will pass immigration reforms this year.

The governors, President Bush, business groups and Arizona Sen. John McCain all favor a guest worker program and finding some kind of legal path for the 11 to 12 million illegal immigrants already in the U.S.

Scottsdale Congressman J.D. Hayworth and Republican gubernatorial challenger Don Goldwater are among conservatives who favor a security-first approach to immigration and the border. They oppose a Senate bill that includes a guest worker program and legal path for some undocumented migrants already in the U.S.

From: Business Journal of Phoenix (www.bizjournals.com)

Insurers Feeling the Heat of Climate-Change Losses

By Chris Rauber
San Francisco Business Times

Global warming is making things increasingly uncomfortable for the insurance industry.

Some of the world's largest insurance companies and brokerages, including giants such as AIG, Novato-based Fireman's Fund Insurance Co., and the international brokerage Marsh & McLennan, are concluding that climate change is not just a scientific fact. It's a business reality that must be faced, dealt with, mitigated -- and perhaps even profited from.

That's the main message of a report released this week by Boston-based Ceres, an investor and environmental coalition that includes large institutional investors and other organizations, including Pacific Gas & Electric Co., Bank of America, the Sierra Club, Catholic Healthcare West and Berkeley nutrition bar maker Clif Bar.

The insurance industry, which as recently as two years ago paid scant attention to climate change, was jolted into action by catastrophic insured losses in 2004 and 2005, according to the report. It said those losses totaled a record $75 billion, including $45 billion from Hurricane Katrina.

The report -- co-written by Lawrence Berkeley National Laboratory scientist Evan Mills, and industry veteran Eugene Lecomte -- said climate change ultimately threatens to bankrupt even the largest insurers and government-run insurance programs unless steps are taken to reduce warming trends believed to be linked to carbon-based emissions or greenhouse gases.

On the positive front, the report -- "From Risk to Opportunity: How Insurers Can Proactively and Profitably Manage Climate Change" -- said the insurance industry "is uniquely positioned to further society's understanding of climate change and advance forward-thinking solutions to minimize its impacts."

The report said nearly 200 products or services are offered by insurers or brokers globally, more than half of them in the United States, that attempt to reduce emissions and energy use. They include:

Fireman's Fund's planned introduction this fall of "green" coverage for commercial buildings that are certified as environmentally friendly and structurally sound or that are rebuilt to those standards after being damaged.

Hurricane loss prevention efforts, Steps taken by insurer FM Global helped policyholders avoid an estimated $500 million in damages from Katrina, after 500 commercial locations spent just $2.5 million on pre-hurricane protective measures.

Carbon emission credit guarantees and other renewable energy-related products from Marsh, AIG and other major industry players.

For its part, Fireman's Fund has asked regulators to approve its new "green" coverage, including discounted premiums or rate credits for commercial building owners whose buildings are certified as environmentally appropriate and discounts for green rebuilds or retrofits of damaged structures.

"A building like that is simply better for us to insure," CEO Charles Kavitsky said.

From: San Francisco Business Times (www.bizjournals.com)

Producer School to be Held in Sacramento in September

The Ultimate Producer School, provided by Agency Management Resource Group (AMRG) is offering its next school starting in September in Sacramento, Calif. The school combines technical coverage information, emphasizing commercial insurance, with sales training and business development planning. It also includes role playing, lectures on technical content of insurance forms and getting your application to the top of the stack.

Students have the option of testing for five of the nine modules toward the Accredited Adviser in Insurance (AAI) designation. Even if the exams are not passed, students still earn more than 50 continuing education credits good toward their license renewal.

The school lasts 15 days and meets one week a month for three consecutive months starting in September and ending in November.

Each student is asked to identify a mentor that will assist in their development within the agency. Progress is shared with this person to help ensure a smooth transition when the formal training is over. The mentor is invited to attend a free sales workshop to learn what the student is being taught and how best to help develop their skills. The mentor is also coached on how to expand on the goal-oriented marketing plan they develop in class.

Classes are held to 18-20 participants. The cost is $3,600 and includes tuition, textbooks, exams, CE filing, daily continental breakfast and afternoon snacks. Travel and lodging are not included.

For more information, please contact Jackie Abeyta, director of marketing and events at 800-601-6711 or jackie@agencymanagement.com or www.agencymanagement.com.

From: Insurance Journal (www.insurancejournal.com)

Marsh Given OK to Accept Contingent Pay When Serving as MGA

In a departure from their $850 million agreement prohibiting all contingent payments, New York officials have agreed to let Marsh & McLennan Cos. Inc. (MMC) accept contingent commissions from an insurer for which Marsh is operating as a managing general agent or underwriting manager.

The changes were included in an agreement signed Aug. 17 by New York Attorney General Eliot Spitzer, Insurance Superintendent Howard Mills and executives from MMC and Marsh, Inc. and filed with the Securities and Exchange Commission.

The new pact modifies the January 2005 agreement that banned all contingent commissions or profit sharing deals involving payments based on the volume of business Marsh placed with various insurers.

Aon Corp., Willis and Arthur J. Gallagher & Co. all signed similar agreements to forfeit contingent commissions.

The amendment defines the situations where Marsh may accept contingencies as where Marsh has been appointed by an insurer as a managing general agent or an underwriting manager, to be the insurer's representative in connection with the management of such insurer's book of business with respect to a specific product or product line; and in such capacity Marsh communicates with prospective insureds only through professional insurance brokers (including those units of Marsh which act in such capacity on behalf of insureds) and places all such business for such product or product line only with and for such insurer.

It clarifies MGA compensation as the compensation received from the appointing insurer as consideration for the MGA services.

Source: Securities and Exchange Commission (www.sec.gov)

From: Insurance Journal (www.insurancejournal.com)

State Fund Offers Credit Extension to Policyholders Affected by Heat Waves

State Compensation Insurance Fund announced today that it will extend credit to policyholders who have suffered a financial loss or business disruption caused by the recent severe heat wave.

"State Fund recognizes that the unprecedented heat has caused a significant disruption and hardship for some of our policyholders," said State Fund Acting President James C. Tudor. "Our offer of credit relief is one way to help them return to normal operations."

State Fund will work with employers who were unable to report payroll figures or submit payments as a result of the heat emergency. Dedicated customer service lines have been established to provide assistance to policyholders whose operations were impacted by the extreme weather. Affected policyholders are encouraged to contact the Customer Service Center at 800-388-0902 to make arrangements for July payroll reports and payments. This program will be offered to employers through a series of newspaper announcements and mailings to all State Fund policyholders. Separate notices will be provided at Heat Illness Prevention Seminars presented by State Fund and Cal OSHA.

State Fund has approximately 229,000 policyholders ranging from small businesses to large group associations. Created by the California Legislature in 1914, State Fund is a nonprofit, self-supporting, fairly competitive public enterprise that guarantees a permanent workers' compensation insurance marketplace at cost for California employers. State Fund has acted as both a moderating and stabilizing influence on the workers' compensation market. For more information, please visit www.scif.com.

Source: State Compensation Insurance Fund (www.scif.com)

From: PR Newswire (www.prnewswire.com)

Basing Auto Insurance Rates on Exact Odometer Readings: Another Pricing Innovation from Progressive Direct

Many auto insurance companies ask customers to estimate their annual mileage when applying for a new policy; these up-front estimates generally have a minimal influence on the overall premium. And, these companies don't ask for updated mileage readings over time. But what if your insurance company asked you to report exact mileage readings over time and, by doing so, you could control how much you pay for car insurance by controlling the number of miles you drive?

In February 2006, The Progressive Direct Group of Insurance Companies announced a pilot program in Iowa and Virginia that gave drivers the ability to do just this; today, the program expands to Arizona and Florida. The program is available to private passenger auto customers.

Progressive Direct has data that support that there is a correlation between the number of miles customers drive and the likelihood of being involved in a crash - if you drive less, your chances of being involved in an accident are lower. By collecting exact odometer readings, this information, when combined with other information used to price car insurance policies, could help advance the science of insurance pricing making rates even more accurate and tailored to individual drivers.

"We're always looking for ways to more accurately price auto insurance and this program is just another way to do this," said Shannon Kelly, Arizona product manager, Progressive Direct. "Virginia and Iowa drivers were able to save an average of 7 percent on their total premium so we're excited to expand the program and offer Arizona and Florida drivers a way to save, too."

Ron Davies, Florida product manager, Progressive Direct said: "This pilot is a win-win - drivers can reduce their insurance costs simply by participating and, if they drive less over time, can save even more. And, we get to collect mileage data, which will help us better understand the correlation between how much a person drives and how likely they are to get into an accident."

How the Pilot Program Works

Progressive Direct customers who volunteer to participate will be asked to periodically submit odometer readings on the insured vehicle(s) they sign up for the program. It's easy - customers simply log in to a password-protected Web site and enter the current odometer reading for each enrolled vehicle. Customers will report odometer readings when buying a policy and again at each renewal of the policy, or once every six months. Customers have the option of signing up all or just some of the vehicles on their policy.

What Discounts are Available

All customers will receive a five percent "participation" discount on each vehicle's total premium simply for signing up; this discount will be applied to every renewal policy as long as they continue to report their odometer readings. They may also receive an additional mileage discount of up to 10 percent, depending upon the number of miles driven, which will be applied to the next policy term's premium. In all, customers could receive as much as 15 percent off each vehicle's total premium for a six-month policy. With the average Arizona and Florida driver paying about $1,000 annually for auto insurance, that's a potential savings of about $150 a year.

How to Sign Up

As with all of Progressive Direct's product research and development efforts, drivers have the choice of participating in the odometer pilot program. New Progressive Direct private passenger auto customers in Arizona and Florida may sign up for the program within 30 days of buying a new policy; existing customers may sign up at or within 30 days of renewal. After signing up, they'll immediately receive the five percent participation discount which will be applied to the current policy term; this participation discount will continue on every renewal as long as they submit mileage readings for each enrolled vehicle for each policy term. Then, depending upon the miles they drive during that current term, they will be eligible for the additional mileage discount which will be applied to the next renewal term's premium. Customers can share mileage data for as many consecutive policy terms as they'd like during the length of the pilot. Additionally, customers won't pay more for insurance than they currently do as a result of reporting odometer readings.

This pilot is the latest effort by Progressive Direct to gather data with the goal of better understanding the correlation between driving behaviors and the risk of being involved in accidents. Progressive Direct is currently testing a usage-based auto insurance discount pilot program in Minnesota called TripSense(R), in which drivers voluntarily share driving data in exchange for receiving discounts on their renewal policy. The data is collected by a small device called a TripSensor(R) that records information about how often, how fast and when a vehicle is driven, along with information about acceleration and braking. In addition, a countrywide driving habits research study is under way that uses the same technology to gather the same kind of driving data; customers are reimbursed $50 for voluntarily sharing six months of data from each car in the program.

Source: Progressive Insurance (www.progressive.com)

From: Business Wire (www.businesswire.com)

Massachusetts Supreme Judicial Court Issues Ruling on Residual Market Auto Reform

The Commerce Group, Inc. (NYSE:CGI) - The Massachusetts Supreme Judicial Court today issued its decision in the case of The Commerce Insurance Company v. Commissioner of Insurance, ruling (on appeal from the Superior Court) that the Massachusetts Commissioner of Insurance has the authority to create an assigned risk plan to manage the allocation of high-risk drivers in the state.

"Although the Court concluded that the Commissioner has the authority to implement an assigned risk plan, the decision by no means requires her to do so," said James A. Ermilio, Executive Vice President of Massachusetts Insurance Operations for The Commerce Insurance Company. "In fact, since the Romney-Healey Administration first presented their assigned risk plan in 2004, insurance premiums have fallen markedly and are expected to fall again in 2007, while the residual market deficit has plummeted and fraud fighting initiatives have proven extremely successful. In addition, the Commissioner has redistributed the involuntary market burden among insurers."

"Taken together, these changes remedied the perceived inequities in the system and have greatly eliminated the need for the overhaul proposed by the Romney-Healey Administration. It would make no sense for the Commissioner to continue with her outdated plan to implement an assigned risk plan, which consumer advocates and legislators have characterized as a 'consumer unfriendly' system," said Ermilio. "Consumers would find themselves rejected by companies of their choice and assigned involuntarily to another carrier for reasons such as credit, education or other non-driving related factors."

In the past, Ermilio has characterized the Commissioner's proposal as potentially disruptive for agents, consumers and the industry and makes it easier for companies to leave the state. Currently, Massachusetts operates under a joint underwriting system where agents are assigned to insurance companies versus the assignment of individual risks. Pending further information from the Commissioner, Mr. Ermilio noted that the Company is unable to determine the overall impact of this decision.

From: Business Wire (www.businesswire.com)

U.S. Traffic Deaths on Rise

By Ken Thomas
Associated Press

Traffic deaths in the United States reached their highest levels since 1990, the government reported this week. The spike in fatalities was attributed to an increase in motorcycle and pedestrian fatalities.

The National Highway Traffic Safety Administration said 43,443 people were killed on the highways last year, up 1.4 percent from 42,836 in 2004. It was the highest number of fatalities in a single year since 1990, when 44,599 people were killed.

The fatality rate also grew slightly to 1.47 deaths per 100 million miles traveled, an increase from 1.45 in 2004. It was the first increase in the fatality rate since 1986.

"We have no tolerance for any numbers higher than zero,'' said Acting Transportation Secretary Maria Cino. "Motorcyclists need to wear their helmets, drivers need to buckle up, and all motorists need to stay sober.''

The annual report found that motorcycle fatalities rose for the eighth straight year, growing 13 percent since 2004. The government said 4,553 motorcyclists died in 2005, compared with 4,028 in 2004. Nearly half of the people who died were not wearing helmets.

Pedestrian deaths increased from 4,675 in 2004 to 4,881 in 2005. NHTSA said it was investigating the increase to try to learn what led to the growth.

Source: Associated Press (www.ap.org)

From: Insurance Journal (www.insurancejournal.com)

Businesses File First in Series of Lawsuits Against Competitors Hiring Undocumented Immigrants

By Peter Prengaman
Associated Press

Frustrated businesses took their fight against illegal immigration to a Los Angeles court Tuesday, filing the first in a series of lawsuits accusing competitors of hiring illegal workers to achieve an unfair advantage.

Anti-illegal immigration groups said the lawsuits were an attempt to enforce immigration law by creating a deterrent against hiring illegal employees.

"We see the legal profession bringing to this issue the kind of effect it's had on consumer product safety,'' said Mike Hethmon of the Immigration Reform Law Institute, a Washington D.C.-based group backing the California cases.

In the complaint filed Tuesday, a temporary employment agency that supplies farm workers sued a grower and a two competing companies.

Similar cases claiming violations of federal anti-racketeering laws have yielded mixed results. The California lawsuits are believed to be the first based on a state's unfair-competition laws, legal experts said.

Santa Monica-based Global Horizons claimed in the lawsuit that Munger Brothers, a grower, hired illegal immigrant workers from Ayala Agricultural Services and J&A Contractors. All the defendants are based in California's farm-rich Central Valley.

The suit alleges that Munger Brothers had a contract with Global Horizons to provide more than 600 blueberry pickers this spring, but nixed the agreement so it could hire illegal immigrants.

"Competitors hiring illegal immigrants is hurting our business badly,'' Global Horizons President Mordechai Orian said. "It's to the point that doing business legally isn't worth it.''

Ayala Agricultural Services manager Javier Rodriguez had not seen the suit but said the company does not hire undocumented immigrants.

"If somebody doesn't have a green card or work documents, we don't hire them,'' he said.

Messages left with Munger Brothers and J&A Contractors were not immediately returned.

With an estimated 11 million illegal immigrants in the United States, undocumented workers are a large part of the nation's work force.

But immigration law enforcement at work sites is limited. In fiscal year 1999, authorities arrested 2,849 people at work sites compared with 1,145 arrests last year, according to the federal Immigration and Customs Enforcement agency.

To prove competitors hire illegal immigrants, businesses could use public records involving prior violations, testimony from former employees who have worked alongside illegal immigrants, and recovered W-2 tax forms that show people working under fake names and Social Security numbers, said David Klehm, the lead lawyer for cases in Southern California.

Companies planning to file additional lawsuits include farms and factories that depend heavily on immigrant labor, Klehm said.

Legal experts said the cases could be difficult to win. Under the California statutes, plaintiffs must prove a competitor directly harmed their business.

"Unless you've got smoking gun evidence, it's hard to tie economic loss of one business to another's practices,'' said Niels Frenzen, a law professor at the University of Southern California.

He believes it is the first time the unfair-competition law has been used to target illegal immigration.

The Global Horizons lawsuit came after a settlement was reached in a Washington state class action suit involving employees of Zirkle Fruit Co. who sued their employer for driving down wages by hiring undocumented workers.

Based on federal anti-racketeering laws, the case was settled for $1.3 million (euro1.01 million) in January after the 9th U.S. Circuit Court of Appeals overturned a lower court decision to dismiss it.

Howard Foster, the lead plaintiffs' lawyer in the Washington case, said he expects more such suits as business owners learn their competitors hired illegal immigrants.

"So many people talk openly about using false documents to assemble an illegal workforce,'' Foster said. "And when you have IDs with upside down numbers and backward pictures, you know they are fake.''

Source: Associated Press (www.ap.org)

From: Insurance Journal (www.insurancejournal.com)

Insurers Bowing To Garamendi Auto Rules

By Matt Brady
National Underwriter

Auto insurers have begun complying with new rate setting regulations for California drivers, although the industry is continuing to challenge the new rules in court.

Chubb announced yesterday it would file a new rate filing and class plan in compliance with the new regulations—a move that State Farm, California’s largest auto insurer, announced last week.

Under the new regulations insurers in rating drivers must give less weight to where they are domiciled.

The new rules took effect last week after courts rejected insurers’ request for a stay while the industry sues to overturn the regulations.

Sam Sorich, president of the Association of California Insurance Companies, said the group hasn’t decided whether or not to pursue an appeal to obtain a stay, and wondered whether pursuing such an appeal would make sense after the rules have already taken effect.

“Frankly, the horses may already be out of the barn on that one,” he said.

The ACIC is continuing with its overall challenge to the regulations, however.

“We intend to pursue that case and have a judicial ruling on whether or not the regulations comply with the law,” Mr. Sorich said.

The industry challenge has been filed in State Superior Court in Sacramento, Mr. Sorich said, adding, however, that it will likely be “a couple of months” before any further developments in the case occur.

The new rules mandate that when calculating insurance rates companies cannot give the location where a car is garaged more weight than three “primary factors”—the driver’s record, years of experience and the number of miles the car is driven.

The location of the car is among 16 “secondary factors” included in the rate setting calculation. Under the prior system, none of the three primary factors could be outweighed by the average weight of the 16 secondary factors, but under the new system no single secondary factor can be considered more than any of the primary factors.

From: National Underwriter (www.nationalunderwriter.com)

Attorney’s Group Says Insurers Greedy; Launches Petition

By Mark E. Ruquet
National Underwriter

Two trial lawyers’ associations issued a report stating insurers in the past have used questionable tactics to deny homeowners claims and said they have launched a petition drive with hurricane victims urging carriers to put policyholders above profits.

Insurer group representatives called the report a “sour grapes” response to an unsatisfactory decision last week in a major flood claims case brought by plaintiffs’ attorneys in Mississippi.

The Academy of Florida Trial Lawyers and the Association of Trial Lawyers of America said their 13-page report issued yesterday illustrates the industry’s practice of denying claim payments to policyholders.

Titled “Pattern of Greed: How Insurance Companies Put Profits Over Policyholders,” it lists a number of incidents during past disasters where it says individual companies were accused of falsely denying claims to customers.

It also asserts that the insurance industry, shortly after Hurricane Katrina hit, began promoting the storm as a flood incident, calling the event “The Great New Orleans Flood.”

It says the industry’s surplus of $427.1 billion for 2005, according to financial information assembled by the Insurance Information Institute, further illustrates the industry’s greed.

“While the insurance industry enjoys record profits and CEOs bulging bank accounts, too many residents of the Gulf region are left waiting for the settlements they deserve to help them get back on their feet,” said Ed Zebersky, president of AFTL, in a statement.

He added, “Whether it be an earthquake, tornado or a hurricane, insurance companies have engaged in questionable tactics over the years to delay or deny the payment of justified and fair claims. That is why we are urging the insurance companies to clean up their act and pay fair and just claims once and for all.”

The Florida Insurance Council, in a statement issued by the Property Casualty Insurers Association of America, said the attorneys’ association’s report is totally without merit.

“While the insurance industry is busy helping hurricane victims reconstruct their lives again, the trial bar appears to be hell-bent on deconstructing the insurance industry,” said Sam Miller, executive vice president of the FIC.

“It’s an apparent act of sour grapes after losing lawsuits in Mississippi that they had hoped would garner millions of dollars for themselves,” said Mr. Miller.

In an Aug. 15 ruling, U.S. District Judge L.T. Senter ruled the majority of damage to a Mississippi home was due to flooding and was not covered by a policy written by Nationwide Mutual Insurance Company with flood exclusion language.

The FIC’s statement noted that the industry has settled close to 95 percent of homeowners claims in Mississippi and Louisiana, totaling nearly $15.5 billion. The industry, it added, will pay more than one million homeowners claims totaling $16.4 billion from Katrina.

The petition, to be found at www.peopleoverprofits.org, calls on insurance industry CEOs to make the industry “clean up its act and pay fair and just claims without delay.”

The site, which bills itself as a grassroots campaign, also has a petition directed to Congress objecting to changes in rules and awards in medical malpractice litigation. The site advocates against what it says are acts by the courts, legislators or business that are not in the best of interest of the general public.

From: National Underwriter (www.nationalunderwriter.com)

Northwestern Mutual Awarded $28.2 Million in Suit Challenging Former Agent

By Fran Matso Lysiak
BestWeek

An Indiana federal judge awarded nearly $28.2 million to Northwestern Mutual Life Insurance Co. in its lawsuit against Policyowner Protection Services Inc. and a former agent alleging their Web site generated suits against it "in exchange for illegal contingency and referral fee payments." The judge also ordered the site be shut down.

In March 2005, Northwestern Mutual sued PPSI and former agent David A. Stinnett in U.S. District Court for the Southern District of Indiana, accusing them of criminal solicitation of lawsuits, criminal unauthorized practice of law and illegal and deceptive insurance consulting. PPSI’s goal was to extort up to $100 million, the life insurer charged. (BestWire, March 4, 2005).

Stinnett was fired in 1994 for stealing a client's money, the life insurer alleged. Retaliating, Stinnett in 1999 launched a Web site, www.nmlcomplaints.com, that attacked Northwestern Mutual. Soon after, Stinnett allegedly incorporated PPSI as an Indiana for-profit corporation to assume ownership of the Web site and serve as a vehicle to continue his illegal campaign against Northwestern Mutual. After Stinnett registered the Web site, he then allegedly transferred its registration to PPSI to hide his relationship with it, the life insurer charged. (BestWire, March 4, 2005).

Chief Judge Larry J. McKinney of the Indiana federal court entered a judgment for nearly $28.2 million on July 27 against PPSI. PPSI "is the mere alter ego of defendant Stinnett," the judge ruled.

Jean Towell, a spokeswoman for Northwestern Mutual, said the judge issued an order of default against Stinnett personally, finding that he "engaged in a willful campaign to evade court orders."

The judge prohibited PPSI and its associates and co-conspirators "from continuing their disparagement of Northwestern Mutual and its employees and representatives, including through the maintenance of a Web site, or the dissemination of e-mails or other mailings."
Under the injunction, Stinnett and his co-conspirators took down and/or blocked access to the PPSI Web site, Northwestern Mutual said.

The Milwaukee-based life insurer alleged that policyholders who called PPSI were given false information about their contracts and unlawful advice concerning legal claims against it. Policyholders were referred to attorneys in Indiana and other states with whom Stinnett and PPSI had "illegal referral fee and fee-splitting agreements (BestWire, March 4, 2005).

In a March 2005 interview with BestWire, Stinnett denied Northwestern Mutual's extortion claim. "This is yet another scare tactic by Northwestern Mutual that seeks to distort the facts regarding their fraudulent practices," he said at the time (BestWire, March 6, 2005).

Source: BestWeek (www.ambest.com)

From: Insurance News Net (www.insurancenewsnet.com)

Chubb Reduces California Auto Rates An Average of 34 Percent

The Chubb Group of Insurance Companies is lowering its automobile insurance rates in California by an average of 34 percent. Furthermore, the company said it is rolling out new coverage options including high limits of liability protection in a state where the number of uninsured and underinsured motorists is among the highest in the nation.

The rate reductions will vary based on factors such as driving record and driver characteristics, with some drivers enjoying a reduction of nearly 50 percent. Chubb also has taken other steps to help customers save money. It has doubled to 10 percent its good-driver credit. It has introduced a companion credit ranging from 10 percent to 20 percent off the auto insurance premium for customers who also have a Chubb homeowners policy.

Chubb offers policyholders the highest available liability limits in the insurance industry. Many customers select liability limits of $10 million or higher, and the typical customer will select uninsured/underinsured (UM/UIM) motorist limits up to $1 million. A corporate car personal extension can extend liability and UM/UIM coverage to company cars regularly used by the customer for personal purposes.

"These new liability coverage options are especially important for affluent drivers in a state where a recent study by the Insurance Research Council found that 25 percent of the drivers are uninsured," said Kurt Morgan, California manager for Chubb Personal Insurance. "What's even scarier is that uninsured motorists are far more likely to be involved in accidents involving injury." Mississippi is the only state with a higher number of uninsured motorists (26 percent), according to the study.

"Uninsured motorist coverage is one of the least understood features in an auto insurance policy. It helps protect you and your family against the other guy, who either doesn't have insurance or not enough of it," Morgan added.

Like other insurers, Chubb submitted class plan filings with the California Division of Insurance to comply with newly imposed auto rate regulations. For more information, visit http://www.chubb.com/personal.

Source: Chubb Group of Insurance Companies (www.chubb.com)

From: Insurance Journal (www.insurancejournal.com)

Automakers Must Disclose If Vehicles Have Black Boxes

Automakers will be required to tell owners if their vehicle has an event data recorder, commonly called a "black box,'' and collect uniform data from the devices, the federal government said.

In the seconds before, during and after a crash, event data recorders can provide information about a vehicle's speed and acceleration, whether air bags were deployed, the brakes were applied or seat belts were being worn.

The National Highway Traffic Safety Administration said beginning with 2011 model year vehicles, automakers will need to disclose the existence of the technology in owners manuals.

The data recorders also will need to be more durable to protect the information during a crash while requiring the auto industry to collect a uniform amount of data to help in the development of new safety regulations.

With more than 40,000 motorists killed on the roads each year, supporters of the black boxes contend they give investigators and automakers an extensive database that can help them design better vehicle safety features and improved roads.

But some privacy experts worry that the information could be accessed by anyone and also argue that most motorists don't know the black boxes are installed in their vehicles.

In Maine, state police used the information from a data recoder in reconstructing an accident involving Gov. John Baldacci's Chevrolet Suburban, which spun off an icy highway in February 2004. The existence of the data led to legislative action.

Effective Wednesday, data recorded on automotive "black boxes'' may not be downloaded without the owner's permission or court approval in Maine.

All told, about 64 percent of the 2005 model year vehicles have the equipment. General Motors Corp. and Ford Motor Co. currently install the devices in virtually all new vehicles.

The rules do not require the data recorders to be used in all new vehicles, despite past recommendations from the National Transportation Safety Board that the devices be mandated.

"We recognize that the automobile industry has already invested considerable effort and resources into developing effective EDR technologies, so we want to be especially careful not to adopt requirements that would result in unnecessary costs,'' the agency wrote.

Source: Associated Press (www.ap.org)

From: Insurance Journal (www.insurancejournal.com)

National Campaign Against Drunk Driving Underway

By Ken Thomas
Associated Press

Drunken drivers beware: Police say they are starting a crackdown this month and the government is promising arrests for those who drink and drive.

The National Highway Traffic Safety Administration said it hoped new advertising would help lower alcohol-involved fatalities, which have barely budged in a decade. The government said 39 percent of all traffic deaths last year involved alcohol.

"We do mean business. If they don't get off the streets voluntarily, we're going to take them off the streets,'' said Acting Transportation Secretary Maria Cino.

The $11 million advertising campaign targets male drivers ages 21-34, who had the highest percentage of drivers in fatal drunken driving crashes. The ads show authorities pulling over three men driving in vehicles filled with beer, wine or liquor, telling viewers: "Make no mistake: You will get caught and you will be arrested. Drunk Driving: Over the Limit. Under Arrest.''

Law enforcement is stepping up its searches for drunk drivers through Labor Day, using sobriety checkpoints and additional patrols that target problem roads and sporting events, festivals or concerts where people may be drinking excessively.

Mothers Against Drunk Driving, an advocacy group, estimated that more than 11,000 law enforcement agencies would be participating in the patrols.

A total of 16,885 people died in alcohol-related crashes in 2005, including pedestrians and cyclists, down just 0.2 percent from 16,919 in 2004. The figures have shown little improvement in recent years _ in 1997, for example, 16,711 people were killed under those circumstances.

Alcohol-related traffic deaths increased between 2004 and 2005 in 25 states and the District of Columbia, including California, Florida and Pennsylvania. Twenty-three states had decreases, including Texas, New York and Illinois. North Carolina and Rhode Island figures were unchanged.

In 2005, fatal crashes involving at least one driver or motorcyclist with an illegal blood-alcohol level of 0.08 dropped more than 1 percent. But traffic deaths in crashes involving a blood-alcohol level of 0.15 _ nearly twice the legal limit _ were up nearly 1 percent.

Some critics contend that tactics such as sobriety checkpoints fail to catch repeat offenders and problem drinkers because those motorists typically know where the roadblocks are located, while those who have a glass of wine with a meal fall into the dragnet.

"It scares responsible adults who had a drink prior to driving,'' said John Doyle, executive director of the American Beverage Institute, which represents restaurants.

But law enforcement officials say they have struggled to fight drunken driving in recent years because alcohol seemingly goes hand-in-hand with sporting events, concerts and celebrations.

It seems like it's fallen off the last few years. The public as a whole, I think, is starting to consider it acceptable behavior again, and that's certainly not the direction we want to go,'' said Wisconsin State Patrol Major Dan Lonsdorf, director of the state's Bureau of Transportation Safety.

Lonsdorf noted that Wisconsin authorities typically arrest more than 40,000 drunk drivers a year "and we barely think we are making a dent in the total number that are on our highways.''

Source: Associated Press (www.ap.org)

From: Insurance Journal (www.insurancejournal.com)

Ca. Auto Insurers Must Follow New Territorial Rating Rule After Court Denies Appeal

By Rick Cornejo
BestWeek

California automobile insurers must follow the new state insurance rule limiting the weight given to territorial rating in setting auto rates after a state court denied their appeal.

In July, three insurance trade organizations, representing more than 90% of the state auto market, filed a lawsuit seeking to stop enforcement of California Insurance Commissioner John Garamendi's new auto rate regulations (BestWire, July 20, 2006). The suit asked the court to declare the regulations illegal and to grant a preliminary injunction.

The trades claim the new rules are unfair, not based on the cost of insurance and would cause rates to rise for millions of drivers. Garamendi and consumer groups contend the regulations fulfill the aims of 1988's Proposition 103 and prevent unfair use of ZIP codes in insurance underwriting.

Last week, California Superior Court Judge Loren McMaster denied the request to issue a temporary injunction blocking the new rules, which state auto insurance premiums must be based more on a policyholder's driving record and driving experience than on the customer's neighborhood or ZIP code (BestWire, Aug. 11, 2006). McMaster ruled the insurers failed to show the rules were illegal.

The groups, the Association of California Insurance Companies, the American Insurance Association and the Personal Insurance Federation of California, appealed the ruling, but the 3rd District Court of Appeal rejected the motion.

"We're disappointed that the appeal court did not grant a stay and allow the injunction," said Nicole Mahrt, AIA spokeswoman. "Companies will have to go ahead and comply with the regulations."

Mahrt noted the courts have issued no decisions on the merits of the new rules and that the insurers' legal challenge is still pending. However, she said the insurer groups are still considering their options and next steps.

"Insurance companies may choose to stubbornly pursue their lawsuit, but in the meantime, they'll have to start following the law," said Mark Savage, senior attorney for Consumers Union, in a statement. Savage praised the court's ruling and said it means "good drivers in California will finally begin getting the insurance premiums breaks they deserve."

Garamendi said in a statement that "once again the courts have ruled that insurers must comply with the will of voters who decided in 1988 that how safely you drive is more important than where you live in the pricing of auto insurance."

The insurers contend the regulations are contrary to state law because enforcement would force 60% of California drivers to pay more for auto insurance so other motorists can pay less. Prop 103 and court interpretations hold that insurance rates must be related to risk of loss.

A 2000 California Court of Appeal decision in the case of Spanish Speaking Citizens' Foundation Inc. vs. Low found a 1996 rule by then-commissioner Chuck Quackenbush allowing territorial rating was a "lawful choice among imperfect options" and consistent with Prop 103. The court ruled "arbitrary insurance rates ... which do not reflect the cost of providing insurance" are contrary to Prop 103's stated goal of protecting consumers from arbitrary rates and practices. Insurers contend the new rules will force them to charge arbitrary rates that do not reflect the actual risk of loss.

Under the new regulations, territory and other factors must not carry more weight in setting auto rates than the three factors set forth under Prop 103: driving record, annual miles driven and driving experience. The regulations were approved by the Office of Administrative Law on July 14 (BestWire, July 17, 2006).

Garamendi has said the former system of setting auto rates was inconsistent with Prop 103 and "unfairly" penalized good drivers because of where they live. The former system required insurers to consider the mandatory factors first, before the 16 allowed optional factors. The last two optional factors considered, claims severity and frequency, are related to territory. But the weight of territory factors could exceed all of the mandatory factors except driving experience.

Automobile Club of Southern California Group voluntarily began following the new regulations before their approval (BestWire, July 10, 2006). USAA has also submitted revised rates to reflect the new rules.

In 2005, the top five writers of private-passenger auto insurance in California, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 12.8% market share; Farmers Insurance Group, with 9.7%; Mercury General Group, with 9.5%; Automobile Club of Southern California Group, with 9.4%; and Allstate Insurance Group, with 9.1%.

Source: BestWeek (www.ambest.com)

From: Insurance News Net (www.insurancenewsnet.com)

Bloomberg: Hope For Battered Insurers

By Daniel Hauck
International Herald Tribune

The outlook for U.S. insurance stocks is brightening just before the first anniversary of Hurricane Katrina, the costliest storm in the history of the United States. Stock prices that are low by historical standards make insurers better investments than other financial companies, said strategists Richard Bernstein of Merrill Lynch and Ed Keon of Prudential Equity.

"We look for things that are cheap and have good earnings momentum," said Keon. "Insurance offers some of both."

Insurers are one of only two out of 24 industry groups in the Standard & Poor's 500-stock index where estimates for third- and fourth-quarter earnings are rising, according to Thomson Financial data.

American International Group, the largest insurer in the world, reported profit this month that beat analysts' estimates.

The S&P 500 insurance index has risen for the past seven trading days, its longest such streak since 2000; last week it surpassed the S&P 500's gain.

Claims related to the storm cost the industry $40.6 billion and Hurricanes Rita and Wilma helped push catastrophe losses to a record $61.2 billion, according to Insurance Services Office in Jersey City, New Jersey. The S&P 500 insurance index rose 3.2 percent last week, its best performance since November. It rose with the broader market after data suggested the Federal Reserve had inflation in check.

The S&P 500 gained every day of the week, finishing Friday up 2.8 percent to 1,302.30 points. The Dow Jones industrials added 2.7 percent to 11,381.47 points and the Nasdaq composite climbed 5.2 percent to 2,163.95 points. Concern that the economy may slump typically spurs buying of "defensive shares," whose earnings are less tied to growth. Insurers may benefit from the trend this year, said Brian Barish of Cambiar Investors in Denver. "Most of these companies were very well prepared for a bad hurricane season, and so far we have seen no storms," Barish said.

From: International Herald Tribune (www.iht.com)

Progressive's Drive Insurance Agents to Sell Homesite Policies

Drive Insurance from Progressive, the largest writer of auto insurance through independent agents and brokers in the U.S., has signed a joint marketing agreement with Homesite Insurance Group, a national provider of home insurance products. The agreement paves the way for a test that will allow selected Drive agents in three states—Ohio, Pennsylvania and Oregon—to provide their Drive auto insurance customers quotes for homeowners, renters and condo insurance policies underwritten and serviced by Homesite.

In the test, independent agents will use Drive's ForAgentsOnly.com (FAO) Web site to provide eligible customers with homeowners product quotes. New or existing Drive Insurance customers are eligible for a homeowners quote from Homesite if they have prior auto coverage without a lapse and at least 100/300 liability limits.

Drive and Homesite will work together to identify a hand-selected group of about 150 agents in the three states to whom this program will be offered. Drive agents will sign an agency agreement and will be appointed by Homesite; the agent is then the agent of record and owns expiration rights to policies sold.

"It is our goal to make the Drive brand a 'must-have' for all growing, successful independent agencies," said Sharena Ali, product manager, Drive. "Providing agents with more flexibility in packaging home and auto policies and leveraging existing easy-to-use technology can help us to solidify our core position in their offices and give us an additional opportunity to grow together with them."

The three-state test will launch in late 2006; if the test is successful, that is, it helps Drive agents sell more Drive policies, further rollout may happen in 2007.

"We are excited about this opportunity," said Fabian Fondriest, CEO, Homesite. "As a monoline home insurer with technology that is highly compatible with Drive's, we look forward to providing packaged home policies with the ease-of-use that Drive agents have come to expect."
The products and services of the Drive Group of Progressive Insurance Companies are marketed to consumers under the Drive® Insurance from Progressive brand through more than 30,000 independent insurance agencies in the U.S.

Founded in 1997, the Homesite Insurance Group writes homeowners, condominium owners, and renters insurance policies in 46 states and the District of Columbia.

Source: Progressive Insurance (www.progressive.com)

From: Claims Guides (www.claimsguides.com)

Study Finds Young Workers More Likely to Be Without Health Insurance

By Roy Moore
Memphis Business Journal

They're young and relatively healthy, but lack health insurance. Collectively, they number more than 10 million and provide challenges to the health care sector, but new ideas to get them enrolled are arriving from a variety of sources.

In an issue that stretches across state lines, young adults -- those aged 19 to 29 -- are increasingly becoming the face of the uninsured, according to data from the Commonwealth Fund. This group accounted for 40% of the growth in the under-65 uninsured between 2000 and 2004, increasing from 11.2 million to 13.7 million Americans.

As a group, the young lack insurance for a variety of reasons. Either they've just graduated from college and are in search of their first jobs, or they've started their careers at smaller companies that don't offer coverage. Perhaps they've just started work, but receive a low salary and need to use that money on other items.

A state study last year found that income was the key factor in coverage in Tennessee. Families that earned less than $30,000 annually -- described as the working poor -- accounted for 61% of the uninsured in this state. The vast majority worked at small companies and couldn't afford insurance.

These individuals and the rest of the 40 million Americans without health care coverage put added financial stress on providers and also put themselves at risk.

"Going without insurance disrupts their access to important preventative health care. It leaves them at high risk for high out-of-pocket expenses," says Mary Thompson, a spokesman for BlueCross BlueShield of Tennessee.

The move among the young comes amid a slow shift away from employer-sponsored health insurance. Companies facing years of double-digit increases in their health care costs have scaled back their benefits or eliminated insurance outright.

However, focusing on employers only tells just half of the story. Recent data suggest that those who work at companies that offer insurance are simply dropping out of the system. Nationally, the percentage of private-sector employees who enrolled in insurance programs at companies offering the benefit slid from 66.2% in 1998 to 63% in 2003, according to recent data from the Robert Wood Johnson Foundation.

In Tennessee, the drop was similar, but not as severe. Those accepting insurance dropped from 67.2% to 64.7%.

Despite these statistics, there are options for uninsured individuals. Insurers like BlueCross offer plans for individuals that don't have the opportunity to sign up for benefits. Some in the industry are tied to health savings accounts, high-deductible plans that can control premium costs, such as BlueCross' BluePartner offering.

In another offering, called SimplyBlue, a 23-year-old female could obtain a plan with a $1,000 deducible and 80% coinsurance that would cost just $71 per month. Thompson says it's not as rich as other policies, but at least gets young people into the insurance pool and covered.

However, the most promising effort to curb the uninsured in this state won't start until next year. Gov. Phil Bredesen's Cover Tennessee would provide basic, major medical coverage to uninsured workers for $150 a month. Workers, employers and the state would share equally in this program that was recently approved by the General Assembly.

While CoverTN has limited benefits, newly hatched ideas from the private sector may fill in the gaps. The Publication Carriers and Retail Employees of America was started last year in Crossville as an association discount club to give its members discounts on accidental death and dismemberment insurance provided by Zurich Life.

The group handles the administrative work, but allow companies to still offer benefits. Under that policy, the group takes all of the client's information and turns it over to an outside firm that writes the AD&D policy. That firm then turns over the data to Zurich Life, which automatically deducts the premium from Publisher Carriers' account.

The goal is to eventually expand into health insurance by leveraging their collective size from AD&D to obtain better rates for group coverage from a health insurer.

From: Memphis Business Journal (www.bizjournals.com)

No Income Requirement for New Mexico Small Biz Insurance Program

By Haley Wachdorf
New Mexico Business Weekly

If your business has fewer than 50 employees and you have not been providing health insurance to them for at least a year, the state of New Mexico has an offer for you.

That might sound awfully familiar, since the state's much-touted State Coverage Insurance plan debuted a year ago and is also aimed at businesses with 50 or fewer employees, but there are some key differences between the state plan and the new program, the Small Employer Insurance Program.

First, while SCI is paid for, in part, by state and federal funds, the small employer plan is not. Second, while SCI requires that employees earn no more than 200 percent of the federal poverty level, SEIC has no such limit, meaning that small businesses with a broader range of earning levels are eligible. Both plans are offered through the New Mexico Health Insurance Alliance and were created as a result of legislation and initiatives pushed by the Insure New Mexico! Council, formed in 2004.

The small employer program will be funded entirely through premium payments from members, so its discounts will not be as dramatic as those available through the state plan, which offers employers insurance at $75 per employee per month, but Mari Spaulding-Bynon, Insure New Mexico! program director, says the discounts should mean employers will save about 15 to 20 percent on what it would otherwise cost them to insure their employees.

"As a result of the Insure New Mexico! Council, it became apparent that a solution was needed for just average folks to have an alternative," she says. "We also realized after we brought up SCI that employers probably don't have just one group or the other, they probably have a combination. This way they can have coverage for low income employees [and] average or high income employees."

Businesses who are in the position Spaulding-Bynon describes can enroll employees in the state plan whose incomes do not exceed 200 percent of the federal poverty level. Those whose incomes exceed that can enroll in SEIC.

For those workers who choose the small employer plan, insurance will be administered by Blue Cross and Blue Shield New Mexico, which also oversees the New Mexico Medical Insurance Pool, an option for individuals with chronic or pre-existing conditions that could make them ineligible for insurance.

Kurt Shipley, vice president of New Mexico business for Blue Cross and Blue Shield and executive director of HMO New Mexico, says Blue Cross signed the final papers for the deal on August 15.

"There is a fairly significant portion of the population that actually makes pretty good money, but doesn't have access to health insurance through a group," he says. "... Because we're just the administrator, it's not a program we expect to make a bunch of money on, it's more that it's an opportunity to fulfill our mission to see as many New Mexicans as we can insured."

Since its launch in 2005, Spaulding-Bynon says 5,000 have enrolled in the State Coverage Insurance plan. The goal for the SEIC plan is to achieve 400 members in its first year.

Employers interested in enrolling in one of the Insure New Mexico! policy programs can call, toll free, (800) 204 - 4700.

From: New Mexico Business Weekly (www.bizjournals.com)

No Broker Duty To Inspect For Flood Risk

Insurance brokers do not have a duty to inspect a business property to offer flood insurance, according to a ruling handed down this week by an appeals court in in Pennsylvania.

The case stems from a Millersburg business that obtained a commercial policy in 1994 through the Brown and Brown Insurance Co., Tampa, Fla., and suffered a flood five years later.

When the business, Saturn Surplus, was informed by its broker that there was no coverage for flood damage, it filed suit asserting the brokers breached their duty by failing to investigate their client’s insurance needs.

In April of 2003 the defendant brokerage won the first round when a trial court granted a motion for a summary judgment and tossed out the case.

Saturn appealed on the case’s merits but Tuesday the Superior Court in Harrisburg ruled that a broker has no such duty to inspect a property before obtaining coverage for a client.

Robert Hurns, counsel for the Property Casualty Insurers Association of America, said he agreed that imposing such a burden on brokers would be onerous.

“The court clearly stated that the initial element in any negligence action is that the defendant owes a duty of care to the plaintiff,” Mr. Hurns said. “The court determined a legal duty did not exist.”

From: National Underwriter (www.nationalunderwriter.com)

California Auto Rate Pressure Seen

By Steve Tuckey
National Underwriter

Some downward pressure on California auto insurance premium pricing can be expected as a result of State Farm’s rate reduction announcement this week, according to an investment bank analysis. Earlier this week, State Farm received permission for an 8 percent average premium rate reduction.

That move came in the wake of an appeals court rejection of efforts by insurance organizations to secure an injunction to stop Insurance Commissioner John Garamendi’s auto rate regulations that de-emphasize a driver’s place of domicile as a rating factor from taking effect.

“While the outcome of these legal battles remains unclear, State Farm’s move could create pricing pressure in California, even if Allstate and others prevail in the courts,” wrote Bear Stearns analyst David Small.

Insurers, while they have not been able to immediately halt application of the regulations, have a suit in progress challenging their legality.

Three trade associations—The Personal Insurance Federation of California, The American Insurance Association and the Association of California Insurance Companies—filed a lawsuit in state superior court in Sacramento earlier this year asserting the Garamendi reforms violate the terms of Proposition 103, the 1988 voter insurance reform initiative, because they require insurers to charge arbitrary rates.

AIA spokeswoman Nicole Mahrt said the groups have not decided on appealing the injunction denial to the Supreme Court. Thus, the new rates will remain in effect until the actual case comes before Superior Court in the future.

Mr. Small wrote that the reduction by State Farm, and the publicity the issue has gotten in the press, could lead to increased customer shopping if they see a potential for lower premiums.

“We suspect the impact will be less than some expect, as it is important to note that the decreases by State Farm in other states have not led to market share or profit deterioration for the larger players, given State Farm’s less sophisticated pricing technology,” Mr. Small wrote.

From: National Underwriter (www.nationalunderwriter.com)

Police Say Bethlehem (PA) Insurance Agent Had Firearm in Carry-On Bag

By Chris Pollock
The Morning Call

The woman who tried to take a gun onto a plane at Lehigh Valley International Airport on Friday afternoon has been identified by airport officials as Linda K. Krisko.

Krisko, who lives at 905 W. Market St., Bethlehem, operates her own insurance agency in Allentown. Airport officials said they detained her after a gun was found by security in one of her carry-on bags. She was going through security before boarding a US Airways flight to Charlotte, N.C.

Krisko has lived for the last five years on W. Market Street with her husband, Brian Ziegler, a self-employed contractor, according to neighbors. Attempts to contact Krisko or Ziegler at home and by phone Sunday were not successful. No one answered a phone call to Krisko's agency.

The couple's neighbor was surprised by her arrest.

''They're no terrorists,'' said Bob Stevens of 826 W. Market St, who said he's known Ziegler all his life.

Stevens described Ziegler as a flying enthusiast with a pilot's license, and Krisko as a well-off professional woman.

''[Krisko] is definitely a good seed and so is he,'' said Stevens. ''I'm sure if there was a gun in her purse it was accidental. I could see her grabbing the wrong purse or something.

''According to Krisko's insurance agency Web site, she is a graduate of Lehigh County Community College and completed her bachelor of science degree at Muhlenberg College. She's listed as a member of Central Moravian Church, associate member of Cedar Lutheran Church and the Allentown Chamber of Commerce.

Federal regulations required airport police to detain Krisko and contact the FBI. The FBI questioned the woman and took her into custody.The FBI also asked the plane to return to the gate so it could question the woman's two companions, who were not taken into custody. The flight was delayed about a half-hour.

From: The Morning Call (www.mcall.com)

Progressive Shifts Gears in 'Pay As You Drive'

By Rad Sallee
Houston Chronicle

In 1998, when the price of gasoline dropped to $1.03 a gallon -- its lowest level in inflation-adjusted dollars since 1949 -- some local drivers gave up a bit of privacy to bring their insurance premiums down, too.

Now, with gasoline nearly $3 a gallon, the time may be ripe for a return of the kind of "pay as you drive" insurance tested here by Progressive Insurance.

"Houston was the frontier for usage-based insurance in this country," said company spokeswoman Leslie Kolleda.

The voluntary program, called Autograph, used Global Positioning System satellites and cellular phones to keep track of customers' cars. By observing speed limits and steering clear of high-traffic or risky areas, drivers reduced their insurance bills by an average 25 percent and some by 50 percent.

Program streamlined For three years, Bill Nichtberger, of Seabrook, carried the dictionary-sized device in his car trunk, wired to an antenna glued to his windshield.

"It was perfect for somebody like me who had driving habits that were just local. My insurance dropped literally almost in half. I would have kept it if they hadn't discontinued it," he said.

After being expanded to Dallas, San Antonio and Austin, the program was dropped in 2001 "because of the high cost and logistics involved in installing the GPS and cellular units," said Progressive spokeswoman Chante Jefferson.

Now Progressive is offering a streamlined version, but only in Minnesota. The program, launched in 2004, uses a matchbox-size device that plugs into the On-Board Diagnostic system that is under the dashboard of cars made since 1996. That's where the mechanic plugs the data analyzer when your "check engine" light comes on. Unlike the GPS-based version, this one doesn't track where the vehicle has gone, but rather the time that each trip began and ended, miles driven, speed at 10-second intervals, and the number of sudden starts and stops.

Instead of transmitting data in real time to the company, the device is removed from the car at intervals and plugged into a personal computer, which uses software provided by Progressive to analyze the data and estimate how much discount the user is entitled to on the current bill.

The customer is free to submit the data or not, without penalty, but a 5 percent discount is guaranteed just for sending it in. The discounts can range up to 25 percent, based on miles driven, time of day that the driving occurred (the wee hours are considered high-risk), the amount of driving in excess of 75 mph and the frequency of abrupt starts and stops.

Progressive says data won't be used as a basis to raise premiums or cancel a policy, but also warns that it can be subpoenaed in legal cases arising from crashes. The company also has voluntary programs in Virginia and Iowa.

Much of the industry is interested in but so far lukewarm to the idea. State Farm Insurance spokesman Dick Luedke called miles driven "a pretty small" factor in determining rates.

"It basically comes down to the fact that not all miles are equal," he said. A mile driven on an interstate highway between cities is less likely to produce a crash than a mile driven on an urban freeway, he said.

In mileage-based insurance, the biggest discounts go to those who drive least.

Source: Houston Chronicle (www.chron.com)

From: Insurance News Net (www.insurancenewsnet.com)

California Workers' Comp Rate Filing Submitted

California's Workers' Compensation Insurance Rating Bureau has submitted its Jan. 1, 2007 pure premium rate filing to the California Department of Insurance (CDI) recommending changes to the California Workers' Compensation Uniform Statistical Reporting Plan - 1995 and the California Workers' Compensation Experience Rating Plan - 1995 effective Jan. 1, 2007, and amendments to the California Insolvent Insurer Rating Adjustment Plan. The Aug. 16, 2006 filing will be amended on or about Sept. 15, 2006 to incorporate the proposed Jan. 1, 2007 pure premium rates.

The proposed pure premium rates are being submitted on or about Sept. 15, 2006 in order to permit the use of loss experience valued as of June 30, 2006 in the pure premium rate computation. In prior years, proposed changes to pure premium rates were submitted to the CDI based on loss experience valued as of March 31 and subsequently amended to reflect the June 30 experience once it became available.

On Sept. 28, 2006, the CDI will hold a public hearing concerning the WCIRB's filing. The hearing will begin at 9:30 a.m. and will be held in the CDI Public Hearing Room located on the 22nd floor of 45 Fremont Street in San Francisco.

The filing and all related documents may be viewed or downloaded from the Filings section of the WCIRB website at http://wcirbonline.org

From Claims Guides (www.claimsguides.com)

Insurer to Refund $1M to Ga. Policyholders

Georgia Insurance Commissioner John W. Oxendine announced he has ordered a Kansas insurance company to return $1,016,518 in overcharges to 159 Georgia customers.

Oxendine said Universal Underwriters Insurance Company will make retroactive premium adjustments to affected policyholders, including interest, for new or renewed policies dating back to Jan. 1, 2002.

The company must provide proof of all premium adjustments and interest paid within 30 days, and must also cease and desist from charging rates that exceed approved rating plans.

The company writes commercial coverage for auto dealerships and aftermarket service companies.

Source: Georgia Department of Insurance (www.inscomm.state.ga.gov)

From Claims Guides (www.claimsguides.com)

Insurance Agent Enters Plea in Fraud Case

A former American Family Insurance agent entered a not-guilty plea to 106 charges of selling fraudulent insurance policies.

In a brief court appearance Wednesday, Nancy Paquette, 45, of W331 S539 Erin Way, Town of Delafield, entered the plea. Paquette was charged with 102 counts July 18, and four counts that were filed in May 11.

Paquette allegedly created false insurance claims using information about real people. According to the criminal complaint, American Family has identified 291 fraudulent life insurance policies and 61 health insurance policies prepared by Paquette.

Paquette, who was once one of the top insurance agents for American Family, paid the premiums on these policies, the complaint alleges.

The total amount paid out by American Family to Paquette for commissions and other various incentives regarding the alleged fraudulent cases totaled $265,512. The amount paid to the insurance company in premiums by Paquette was about $201,000, the complaint said.

The complaint alleges Paquette pocketed two checks totaling $54,406 in 2003 from a commercial customer.

Paquette is charged with one count each of forgery and misappropriation of personal identifying materials for a total of 52 fraudulent insurance policies. She also faces two felony theft charges for allegedly stealing $54,000 from a commercial customer that paid her to insure her business.

The maximum sentence for each forgery count is 15 years in prison, 10 years in prison for each misappropriation count and 20 years for each theft charge.

Her next court date will be scheduled at a later time.

From TownNews.com (www.townnews.com)

Ban BlackBerry Use By Drivers, Say Motorists

By Matt Brady
National Underwriter

A study by an auto insurer has found that most American motorists would favor additional bans on driving while using personal electronic devices.

The poll by Meriden, Conn.-based Response Insurance found 65 percent of drivers who own a BlackBerry device would support a ban on their use while driving, and more than 58 percent of non-BlackBerry owners would support such a ban.

Similarly, most drivers favor banning the use of hand-held cell phones while driving, with 59 percent of cell phone owners and 62 percent of the overall driving population supporting a ban.

Support for a cell phone ban, the poll found, drops significantly, however, if the ban would involve so-called “hands-free” cell phones. Only 19 percent of those who own a hands-free phone would support a ban, and 28 percent of the overall driving population.

The study, “The Response Insurance National Driving Habits Survey,” also showed significant support for other bans, including a prohibition on text messaging with 72 percent supporting a ban, reading with 79 percent supporting a ban and grooming, which 68 percent supported banning.

“Our survey results appear to reflect a growing concern that multitasking behind the wheel is getting out of hand,” said Mory Katz, chairman and chief executive officer of the Response Insurance Group. “But, the fastest way drivers can put those concerns into action is by not engaging in activities that present distractions.”

Some proposals included in the survey did not garner wide support, however. Only a minority of drivers, 36 percent, favored a ban on eating while driving, 34 percent supported a ban on smoking and 28 percent supported banning listening to an iPod or MP3 player while behind the wheel.

According to Response Insurance, the survey involved 1,000 respondents and has a margin of error of plus-or-minus 3 percent.

From National Underwriter (www.nationalunderwriter.com)

Allstate to Drop 26,000 Texas Homes

By Purva Patel
Houston Chronicle

About 26,000 Allstate customers living one county inland from the Texas coast will be searching for new home insurers soon.

The insurer told its agents Thursday that it doesn't plan to renew policies on thousands of nonbrick homes in 14 second-tier counties, including Harris County.

"It's a part of our overall effort over the past few months to make sure we're protecting our ability to meet future customer needs throughout the state of Texas," company spokesman Joe McCormick said.

The company, which is the state's second-largest insurer behind State Farm Insurance Co., will also stop selling mobile home coverage, starting Dec. 3, in parts of Harris, Bee, Brooks, Fort Bend, Goliad, Hardin, Hidalgo, Jackson, Jim Wells, Liberty, Live Oak, Orange, Victoria and Wharton counties.

Earlier this year, Allstate said the rising costs of reinsurance -- insurance that companies buy for themselves to pay for catastrophic losses -- was forcing it to drop windstorm coverage upon renewal from 65,000 home policies along the Texas coast.

Others that have cut back wind coverage include American National Property and Casualty, Texas Farm Bureau Insurance, Horace Mann Insurance, Beacon Insurance and Middle States Insurance.

"You will find that most companies are simply writing new business outside the first and second tiers and staying away from the coast," said Mark Hanna, a spokesman for the Insurance Council of Texas, an industry trade group. "Reinsurance has skyrocketed."

Allstate said it has reached an agreement with Dallas-based Stonington Lloyds Insurance Co. that will allow Allstate to sell Stonington policies. These policies can replace coverage along the coast for those Allstate is dropping.

Stonington is a subsidiary of RenaissanceRe Holdings, which is based in Bermuda.

Policyholders will still have to meet Stonington's requirements, meaning they are not guaranteed placement.

Allstate said it will notify affected customers 90 days before their policies expire.

Source: Houston Chronicle (www.chron.com)

From Insurance News Net (www.inisurancenewsnet.com)

BestWeek: Suit May Be Decided, but Wind-Versus-Flood Debate Continues

A federal judge in Mississippi may have ruled in favor of insurers in a recent court battle, but experts say the wind-versus-flood debate is far from over. For one, the decision is likely to be appealed. And its impact as precedent in future cases is uncertain as each case is being considered fact-specific, according to an article in the August 21 BestWeek.

But insurance attorney Vince Vitkowsky, a partner with the national law firm of Edwards Angell Palmer & Dodge, said Judge L.T. Senter's ruling in the Leonard vs. Nationwide case was a "win for homeowners insurers" and a "victory for the legal system."

Senter ruled that Nationwide Mutual Insurance Co. had met the burden of proving the majority of damage to an insured's home during Hurricane Katrina was caused by flood, an excluded peril. In a statement, Nationwide praised the decision as upholding the long-standing flood exclusion, which they say excludes storm surge caused by hurricanes.

While the ruling may not be literal precedent because of the fact-specific nature of future cases, Vitkowsky said it is consistent with previous rulings by Senter and reveals the judge's "way of thinking."

Also featured is Best's Insurance Composite Index, which finished the week of August 17, 2006, at 1,119.24, up 5.81% from a year ago. The composite index reflects the performance of 132 insurance stocks. The week's top performers were ACMAT Corp.; James River Group; KMG America Corp.; Sun Life Financial; and National Interstate Corp. The week's bottom performers were Direct General Corp.; Safety Insurance Group; Penn Treaty American; Scottish Re Group and Citizens Financial Corp.

BestWeek is published by A.M. Best Co. for insurance professionals.

Source: BestWeek (www.ambest.com)

From Insurance News Net (www.insurancenewsnet.com)

Auto Insurers Yield to Rate Regulations

By Marc Lifsher
Los Angeles Times

Virtually all the state's major auto insurers succumbed Thursday to years of pressure and began revising the way they set auto insurance rates.

Following the lead of industry giant State Farm Mutual Automobile Insurance Co., 32 of the state's insurers complied with new regulations requiring rates to be based mainly on motorists' overall driving records rather than their ZIP Codes.

Insurance Commissioner John Garamendi said it was good news for California drivers. "Today, the biggest company of all, State Farm, said it would fall in line," he said at a state Capitol news conference. "The good drivers in the state are finally going to be rewarded." Garamendi called the move to comply with new state regulations a finale for what's been a 17-year political and legal battle over Proposition 103, the automobile insurance initiative approved by voters in 1988.

For years, auto insurers have relied on ZIP Codes as a key element in calculating individual insurance rates. Insurers say that geography is the best way of predicting whether an accident or theft might occur. Consumer groups, on the other hand, contend that ZIP Code rate setting treats all residents of a neighborhood the same whether they are good drivers or bad.

Proposition 103 requires that rates be based mainly on a motorist's safety record, number of years behind the wheel and annual miles driven. It also provides a 20% "good driver" discount for people with a clean driving record of three years. Insurers counter that Proposition 103 and Garamendi's regulations are illegal and would raise rates for 60% of the state's drivers, who live in suburban and rural areas.

People who live in congested cities generally have more accidents and file more claims than residents of suburban or rural communities, insurers said.

The threat of rate hikes is an insurers' scare tactic, said Mark Savage, an attorney with Consumers Union, the publisher of Consumer Reports magazine. "They say your premiums will go up and you should be afraid," he said. "But it turns out that when they do the filings, premiums are not going up across the state of California."

That appeared to be the case Thursday as insurance companies rushed to meet a court-ordered deadline for filing their new rate plans.

But unlike State Farm, which tied its rate filing to an 8% cut in premiums, many other insurers offered either small overall reductions or none at all.

AAA of Northern California's rate plan cut premiums by an average of just 1.9% for 1.1 million members. Farmers Insurance Group and Safeco Corp. submitted plans they called "revenue neutral," meaning that rate increases for some customers were balanced by reductions for others.

Farmers, the state's second-largest insurer, came up with pricing criteria that reduce reliance on ZIP Codes but don't significantly change the premiums for most of its 2 million customers in California, spokesman Jeff Beyer said. In October, the company cut its rates by an average of 22%, he said.

Details on the other filings Thursday will not be known until the documents are analyzed by the California Department of Insurance, department spokesman Norman Williams said.

Nevertheless, Garamendi noted that he had already received filings lowering rates by a total of $370 million from insurers representing more than a quarter of the California market. In earlier submissions, the Automobile Club of Southern California asked for a 7% average rate decrease, and USAA requested a 5% drop.

In Thursday's filing, State Farm said it would lower premiums by $204 million for 93% of its 3 million drivers at the same time it would comply with the Proposition 103 regulations. State Farm credited a decline in losses with generating extra revenue that would allow the company to lower premiums for motorists living in cities, suburbs and rural communities.

Insurers' profits have ballooned in the last three years as claims declined, partly because of safer vehicles and more cautious driving, particularly in cities, Garamendi said.

The combination of good times and a series of legal setbacks may have convinced most insurers to quit trying to thwart Proposition 103, said Jim Rogers, an auto insurance industry consultant.

"I think the companies have decided they'll figure out ways to live with it," he said. "They may have lost their best predictor of losses, so they'll just have to hedge their bets."

They've had three profitable years, probably the best three in decades, so they have room to make some changes."

From Los Angeles Times (www.latimes.com)

Safeco Announces Instant Commercial Auto Endorsement Processing

Safeco today introduced online technology that allows independent agents to make instant changes to clients' commercial auto policies. The real-time capability cuts a one-week process into a two-minute drill -- saving agencies time and enhancing their customer-service experience.

Safeco agencies in 10 states received access today to Safeco's enhanced Policy Change tool. The rest of the company's more than 9,000 independent agent partners will receive access during rolling state launches that run through Nov. 9. All agencies can use Safeco's single intake system for commercial endorsements, a simple policy change Webform introduced this spring that eliminates agents' need to call, mail or fax.

"Our real-time Policy Change tool for commercial auto helps agents deliver results on the spot," says Bill Miele, vice president of Safeco Risk Services. "We've introduced a once-and-done transaction for agents, allowing them to provide better customer service while increasing operational efficiencies."

Commercial auto is the first business line to be included with real-time processing in Policy Change. More commercial endorsements will roll out the capability in 2007. Most of the company's personal lines products already offer real-time policy change, including auto, home, fire, motorcycle, off-road recreational vehicles, umbrella and watercraft.

Policy Change resides on Safeco Now(R), the company's online sales-and-service platform. Safeco Now is best known for its real-time quoting and issuing of more than a dozen personal and commercial products. The site also hosts easy-to-use policy administration tools that reduce a lot of the costly busy work for independent agencies.

"Today's introduction is just the latest step in Safeco's continual drive to improve operating efficiencies inside agents' offices, giving them more time to sell and grow their business," Miele said.

Safeco, in business since 1923, is a Fortune 500 property and casualty insurance company based in Seattle. The company sells insurance to drivers, home owners and owners of small- and mid-sized businesses primarily through a national network of independent agents and brokers. More information about Safeco is available at www.safeco.com.

Source: Safeco Insurance (www.safeco.com)

From Insurance News Net (www.insurancenewsnet.com)

CA Commissioner Announces State's Largest Insurer Will Seek Rate Reductions

Insurance Commissioner John Garamendi today announced that State Farm Insurance, California’s largest auto insurer, has ended its battle against his Good Driver Reforms, and is seeking an 8% average reduction for its policyholders while simultaneously implementing the new regulations.

State Farm’s action means that most of its nearly 3 million policyholders will see an annual reduction in premium rates totaling $204 million. That amount, combined with earlier reductions by the Auto Club of Southern California and USAA Insurance, brings the dollar savings for consumers to nearly $370 million since the reforms were introduced last year.

“I am very pleased that the courts have ruled that the Good Driver Reforms can move forward,” said Commissioner Garamendi. “The estimated $370 million in reductions, pending approval of State Farm’s plan, proves that the reforms can be implemented in a manner that benefits all consumers.”

Today marks the deadline for insurers in the state to file new auto rating plans with the Department that comply with the requirements of the Good Driver Reforms. The reforms were introduced last year to compel insurers to comply with the will of voters who approved Proposition 103 more than 17 years ago. The reforms require insurers to give more importance to how safely you drive than where you live when pricing auto insurance.

Due to the actions of former Commissioner Chuck Quackenbush, insurers have for years avoided compliance with the law’s provisions calling for rates to be based primarily on three mandatory factors - driving record, driving experience, and number of miles driven.

Instead, thanks to the Quackenbush system, insurers have been allowed to give more importance to other factors, such as marital status, gender, and most frequently, ZIP Code. This system resulted in widely varying rates charged to identical drivers living across the street from one another, based solely on their respective ZIP Codes.

Insurers will be given two years to fully comply with the new standards, though they must show significant progress towards meeting the goal during the first year after implementation of the regulations.

From California Department of Insurance (www.insurance.ca.gov)

Calif. Governor, Commissioner Propose Legislation To Oversee State Fund

California's Governor Arnold Schwarzenegger and Insurance Commissioner John Garamendi have jointly submitted legislation to establish oversight responsibility and regulatory authority for the State Compensation Insurance Fund.

The legislation assures appropriate regulation of State Fund as an insurance carrier by the California Department of Insurance while preserving the authority of the Governor and State Fund's Board of Directors over its assets and operations as well as preserving the oversight responsibility of the Legislature.

State Fund Acting President, Jim Tudor, said, "State Fund supports the legislation submitted today by Governor Schwarzenegger and Insurance Commissioner Garamendi and welcomes the resolution of the critical issues between State Fund and the Department of Insurance. State Fund would like to thank the Governor and the Insurance Commissioner for their leadership in drafting this legislation."

Established by the California Legislature in 1914, San Francisco-based State Compensation Insurance Fund is a self-supporting, nonprofit, fairly competitive public enterprise that provides workers' compensation insurance coverage at cost to California employers. Web site: www.scif.com.

From Insurance Journal (www.insurancejournal.com)

Industry Victory Viewed In Nationwide Case

By Steve Tuckey
National Underwriter

Insurance industry representatives uniformly expressed satisfaction that a federal judge has upheld the sanctity of the flood exclusion.

U.S. District Judge L.T. Senter ruled Tuesday in favor of Nationwide Mutual Insurance Company in a case brought by aggrieved Mississippi policyholders claiming that Hurricane Katrina damage to their home came from wind-driven rain and not flooding.

Ernie Csiszar, president of the Property Casualty Insurers Association of America, said the Senter ruling made it clear that the flood exclusion applies to storm surge.

“In the insurance coverage debate over wind vs. water, Judge Senter’s ruling has taken much of the wind, literally and figuratively out of the plaintiff’s attorney’s argument,” he said in a statement.

Cecil Pearce, vice president of the American Insurance Association, said in a statement that the decision is a “significant step forward for insurers and others committed to rebuilding after Katrina.”

Mr. Pearce added, however, that the industry could still face challenges. “Each and every claim must be decided on its own merits,” he said. “Each case is different, involving different fact patterns and different levels and types of coverage that apply to each policyholder.”

Neal Alldredge, senior vice president for the National Association of Mutual Insurance Companies, pointed out that “all of the individual experts were ‘qualified’ to express the opinion they rendered and none of the expert testimony was stricken.”

The industry’s next challenge comes in Mississippi state court where Attorney General Jim Hood is suing several insurers, claiming their policy language is ambiguous and that any ambiguity should be seen in favor of the policyholder.

“I think this will do some damage to that,” Mr. Alldredge told the National Underwriter.

In a written statement, Nationwide said it was pleased with the decision and would “continue to adjust claims on a case-by-case basis.”

The one straw plaintiffs could grab was Judge Senter’s contention that insurers could not cancel coverage for wind damage when it occurred in combination with flooding.

Robert Hartwig, chief economist for the Insurance Information Institute, noted, however, that Nationwide did not even invoke the so-called anticoncurrent causation clause in its denial of the claim in question.

Plaintiffs’ attorneys Richard Scruggs and his son, Zach Scruggs, could not be reached for comment.

Mr. Hartwig took issue with Richard Scruggs’ post-verdict comment that the judge left “the groundwork for homeowners to do very well in those cases.”

“The judge’s ruling just made it very economically unfeasible for trial lawyers to bring these cases in the future,” Mr. Hartwig noted.

From National Underwriter (www.nationalunderwriter.com)

Calif. Commissioner Calls Court Ruling on Auto Regs a Victory

On Wednesday afternoon, the 3rd District Court of Appeal in Sacramento, Calif., refused to overturn a Superior Court ruling that required insurers to comply with the new auto rating regulations.

"Once again the courts have ruled that insurers must comply with the will of voters who decided in 1988 that how safely you drive is more important than where you live in the pricing of auto insurance," said the Commissioner John Garamendi in a statement he released after the ruling.

"We are disappointed with the ruling, but to my knowledge, all of PIFC's members will abide by the requirements and file their auto factor plans at 9 a.m. tomorrow," said E. Jerry Davies, director of communications for the Personal Insurance Federation of California.

PIFC was joined by the American Insurance Association (AIA) in filing the lawsuit and appeal. Over the past several weeks, the state's insurance associations have been fighting the decision to implement the new regulations because they believe the new regulations will unfairly raise rates for the majority of drivers. They said giving more weight to a driver's safety record, number of years driven and annual miles driven than any other rating factors would create rates that are not based on actuarial data, and therefore would be against the law.

Now that the appeal has been denied, insurers must submit new rating plans that comply with the regulations this week.

From Insurance Journal (www.insurancejournal.com)

N.C. Appellate Court Sides with Insurer in Denying Pre-Storm Coverag

An insurance company legally denied coverage to a business seeking to renew its policy in the days before Hurricane Isabel struck North Carolina, the state's Court of Appeals ruled Aug. 15.

HPB Enterprises, the owner of a waterfront community on Albemarle Sound, unsuccessfully tried to resume its insurance Sept. 15, 2003, just three days before Hurricane Isabel slammed in to the North Carolina coast, damaging 53,000 homes.

As is often the case in anticipation of hurricanes, the North Carolina Insurance Underwriting Association implemented a policy on Sept. 14, 2003, that declined any "new or increased coverage'' until Hurricane Isabel had passed. The state insurance department approved that plan.

HPB Enterprises suffered property damage during the event and appealed the insurer's decision to deny coverage, arguing that the business should have been able to renew its coverage, which had expired at the beginning of August. Resuming the policy should not be considered "new or increased coverage,'' attorneys for HPB argued.

However, the Court of Appeals sided with the agency's appeals committee, the state insurance department and a trial court, all of which said that the renewed coverage was blocked under the insurer's hurricane policy.

"Contrary to (HPB Enterprises') assertions, it had no automatic right to continue an expired policy by submitting the proper application and paying the premiums,'' wrote Judge Rick Elmore in the unanimous decision.

Attorneys from both the insurance association and HPB Enterprises did not return phone calls seeking comment.

Source: Associated Press (www.ap.org)

From Insurance Journal (www.insurancejournal.com)

Oops...172 Pa. Driver's Licenses Accidently Voided

A bureaucratic error led to the accidental cancellation of 172 Pennsylvania driver's licenses this week, according to the state Department of Transportation.

The licenses have been restored, but residents who received notices that their licenses were canceled need to get new ones, PennDOT spokeswoman Claudine Battisti said last week.

The error occurred after the department's office of risk management, which investigates fraud, identified 172 licenses that had nonmatching photos, Battisti said.

Essentially, licenses that used the same name and license number but appeared to have nonmatching photos in their records were pulled for state police to investigate.

Before that investigation was complete, however, the owners of those 172 licenses were sent notices that their licenses had been canceled, Battisti said.

"Flat out, this was a mistake on our part,'' she said. "The letters were sent in error.''

The Bucks County Courier Times learned of the mistake when one of its reporters received a notice that his license had been canceled.

Each affected driver will need to bring a Social Security card, birth certificate and two forms of proof of residency to a license center to get a new driver's license, said Battisti.

"Unfortunately, there is still a potential for fraud here,'' she said.

Source: Associated Press (www.ap.org)

From Insurance Journal (www.insurancejournal.com)

Nationwide Wins First Trial Over Katrina Coverage

A judge in Mississippi ruled in favor of Nationwide Mutual Insurance Co. in the first trial of hundreds of insurance lawsuits over damage by Hurricane Katrina.

U.S. District Judge L.T. Senter in Gulfport, Mississippi, ruled for the insurer today in the case of Pascagoula, Mississippi, residents Paul and Julie Leonard. The company said most of the damage was caused by water and was thus excluded from their policy. The couple claimed about $150,000 in damage was caused by wind-driven storm surge and was covered.

"Storm surge is a type of flooding that is covered by flood policies sold under the National Flood Insurance Program and excluded under standard homeowners policies,'' Senter wrote.

The judge's decision after a nonjury trial last month may signal how similar lawsuits against other insurers, including State Farm and Allstate Corp., will be resolved. Senter will preside in most cases filed in federal court over the hurricane that devastated New Orleans and caused widespread damage in Mississippi a year ago.

Another issue in the suit was whether an agent told the Leonards the family didn't need government flood insurance because their policy covered all hurricane damage, which the couple claimed and the agent denied. Senter said that claim wasn't supported by evidence.

Other Cases

The Leonards' lawyer Richard Scruggs has more than 1,000 clients in lawsuits against insurers for refusing to pay Katrina claims.

Scruggs couldn't immediately be reached for comment. Joe Case, a spokesman for Columbus, Ohio-based Nationwide, declined to comment immediately.

Nationwide has spent $230 million settling claims in Mississippi. Insurers have paid $40.6 billion for Katrina damage, according to Property Claim Services, a Jersey City, New Jersey- based firm that surveys insurers about claims.

The Leonards filed their claim after the Aug. 29, 2005, hurricane hit the three-county Gulf Coast of Mississippi. Their home sustained damage from five feet of water the Leonards said was storm surge.

Flooding is excluded from coverage in the Nationwide policy. Storm surge wasn't mentioned in the Leonards' policy, the family's lawyers argued, making the policy ambiguous and under Mississippi law requiring an interpretation in favor of policyholders.

Agent's Damage Claim

A hurricane deductible provision led the couple to believe the water damage during the storm would be covered, their lawyers argued at trial.

The Leonards claimed their insurance agent, Jay Fletcher, misrepresented their coverage by saying they didn't need government flood insurance.

The agent "made no representation that suggested that the water damage exclusion in the Nationwide homeowners policy did not apply in the context of a hurricane,'' Senter wrote.

The case against Nationwide is one of more than 240 filed by attorneys Scruggs, his son Zach and John "Don'' Barrett, who negotiated a $206 billion settlement with the tobacco industry in 1998.

Nationwide since Katrina has added a specific exclusion of storm surge to its homeowners' policy.

The case is Leonard v. Nationwide Mutual Insurance Co., 1:05-cv-00475, U.S. District Court, Southern District of Mississippi (Gulfport).

From Bloomberg News (www.bloomberg.net)

Conning: Expect Strong Profits This Year

Property-casualty insurers can expect another year of overall industry underwriting profit in 2006, a new Conning study found.

The results should match those of 2004, according to the latest Conning Research and Consulting Inc. forecast report for the property-casualty industry, which provides a first look at results through 2008.

“Analysis of 2005 results for the industry shows a remarkable consistency in profitability by line of business, aside from the effects of catastrophes,” Stephan Christiansen, director of research at Conning Research & Consulting Inc., said in a statement.

“Profitability continues through 2006, but slowing premium growth, rising loss costs and accumulating surplus will take their toll and the industry will again show combined ratios above 100 percent in 2007 and 2008,” he added.

The study identifies several conditions that are clouding our 2006-2008 forecasts. “Market conditions are becoming more price-competitive outside of catastrophe-prone areas, but with some volatility,” he said.

Strong surplus accumulation, loss reserves and cash flow stimulate the trend, the report asserted.

The projection also reflects an expectation for heightened catastrophe losses, but below the levels seen in 2004 and 2005.

Increased pricing for coastal exposures, and higher costs and reduced availability of reinsurance are helping to moderate these premium trends through 2008. “Overall, we expect ROEs will slowly subside, falling from 9.2 percent in 2005 to 7 percent by 2008,” Mr. Christiansen said.

From National Underwriter (www.nationalunderwriter.com)

Fla. Creates Commercial Insurer Of Last Resort

Florida has established a new Joint Underwriting Association to provide commercial property insurance to those businesses unable to secure coverage in the private market.

The new JUA was established through an emergency rule approved by Governor Jeb Bush after a presentation by Insurance Commissioner Kevin McCarty on the growing commercial insurance problem facing the state. Under Florida law, the state can form a JUA to help provide commercial property coverage only if enough businesses appeal to the state for help.

“I have heard from too many Florida business owners who are facing losing their insurance in the middle of hurricane season,” Mr. McCarty said in a statement. “If left unchecked, this problem will have a negative effect on our state’s economy, as we have already heard from businesses that may have to move out of Florida.”

The emergency rule makes use of a 1986 law that created a similar JUA to deal with a commercial insurance crisis at the time, according to the Florida Office of Insurance Regulation. That JUA was eventually deactivated, but the statute—and the triggering mechanisms to re-establish the JUA—remained on the books.

Gov. Bush’s cabinet voted unanimously to establish the emergency rule for 90 days, during which the normal rule-making process will proceed. The new JUA will be overseen by a 13-member board, which will be appointed by Tom Gallagher, state chief financial officer.

Also on Tuesday, Gov. Bush named 12 members of a newly created Property & Casualty Insurance Technical Advisory Committee. This included executives from Travelers of Florida, State Farm, Allstate and American Strategic Insurance. The committee also includes members from the banking industry, agents and lawyers. All members’ terms expire in May of next year.
Additionally, Gov. Bush appointed retired insurance executive Richard DeChene to the board of Citizen’s Property Insurance Corp., the state’s homeowners’ insurer of last resort.

From National Underwriter (www.nationalunderwriter.com)

Safer Cars Counter Other Trends

Passenger vehicle design has improved over the years enough to counter trends that have decreased safety on the road, according to a new study.

Without these design improvements, the motor vehicle death rate per registered vehicle would have stopped its decline in 1994 and started going up, according to a study by The Insurance Institute for Highway Safety.

“Death rates per vehicle and per mile have been going down for decades, and they still are,” Institute President Adrian Lund said in a statement. “In recent years it's the vehicles, not better drivers or improved roadways.”

The study revealed the importance of vehicle design changes and the kinds of vehicles motorists are choosing to drive. On the downside, however, is a loss of momentum for effective traffic safety policies on seat belt use, alcohol-impaired driving and speeding, the study asserted.

Researchers separated vehicle effects from other effects on motor vehicle death rates during 1985-2004 by estimating what the death rate trend would have been if vehicle designs hadn't changed over the years. “In other words, if people still were driving the kinds of vehicles they drove in 1985,” Mr. Lund said.

The death rate trend given this hypothetical vehicle fleet started to go up in the 1990s—very different from the actual downward trend during the past 10 years.

“This suggests that an increasingly dangerous traffic environment has been offset since 1994 only because people are driving vehicles that are more protective,” Mr. Lund said, adding, “Of course the vehicle design changes are good, but people shouldn't have to buy new, more crashworthy vehicles to maintain their safety.”

From National Underwriter (www.nationalunderwriter.com)

Safeco Announces $250 Million Share Repurchase

Safeco today announced it has executed a Rule 10b5-1 trading plan to purchase up to $250 million of its outstanding shares of common stock. A Rule 10b5-1 plan allows Safeco to repurchase its shares during periods when the company would normally not be active in the market because of its own internal trading windows.

On Aug. 11, 2006, Safeco reported that its board of directors had increased the company's share repurchase authorization to 10 million shares, which is equal to 8.6 percent of Safeco's shares outstanding at June 30, 2006. If the current 10b5-1 program is fully executed, approximately 5 million shares will remain available for repurchase under board-approved repurchase programs.

Since 2003, Safeco has repurchased 27.5 million shares, or 19.9 percent of its then-outstanding shares, at a total cost of $1.4 billion.

Safeco, in business since 1923, is a Fortune 500 property and casualty insurance company based in Seattle. The company sells insurance to drivers, home owners, and owners of small- and mid-sized businesses principally through a national network of independent agents and brokers.

Source: Safeco Insurance (www.safeco.com)

From PR Newswire (www.prnewswire.com)

Insurers Eye November Ballot Questions

By Eleanor Barrett
BestWeek

Insurance-related ballot initiatives facing voters in November are packing a punch.

From banning credit-based insurance scoring in Oregon to allowing citizens to sue judges whose decisions they don't like in South Dakota, pending public questions across the United States have the insurance industry on alert.

California has an initiative to change the way corporations may contribute to political campaigns. Florida is putting forth a constitutional amendment that would make it tougher to amend the state's constitution.

Of them all, Constitutional Amendment E in South Dakota is one of major concern, said Jeff Junkas, a spokesman for the American Insurance Association.

Also known as JAIL -- the Judicial Accountability Initiative Law -- the proposal would allow citizens to sue judges and others after exhausting the traditional appeals process.

Junkas said, for example, that insurers could be impacted in cases such as a civil action in which an insurer has prevailed but the plaintiff chooses to exhaust the appeals process and then go after the judge through JAIL.

"Insurers would then be left to fight the battle all over again under a completely unchecked fourth branch of government," Junkas said.

The Oregon measure is equally as troublesome for industry interests, said Patrick McCormick, a spokesman for Oregonians Against Insurance Rate Increases.

While legislative proposals to ban credit-based insurance scoring have been common, Measure 42 represents the first ballot question of its kind.

McCormick said that not only does the initiative set the stage for higher insurance premiums for about 60% of personal-lines policyholders in the state, but commercial lines would be impacted as well.

"Creditworthiness is an accurate predictor of loss risk in commercial insurance. It's used broadly in a number of categories in commercial insurance," McCormick said. "This affects the affordability and availability of commercial insurance in the state and has a great potential to impact business."

As with South Dakota's ballot question, the Oregon measure has drawn strong opposition from business interests, which have formed coalitions to educate the public of ballot issues that they say appear to be consumer friendly but actually are bound to harm consumers in the long run.

A little tamer in terms of impact is Proposition 89 in California, which seeks to change the process by which corporations may contribute to candidates' campaigns, said Sam Sorich, president of the Association of California Insurance Companies.

"The way it's drafted, corporations would be curtailed from contributing, but trial attorneys would still be able to do it," Sorich said.

In Montana, a constitutional amendment is required to change the name of State Auditor John Morrison's title to "insurance commissioner." Morrison said the prospect has gained the public's attention much like "a falling leaf."

Source: A.M. Best Company (www.ambest.com)

From Insurance News Net (www.insurancenewsnet.com)

Fla. Charges Agency with 'Sliding' Ancillary Costs onto Auto Policies

Tom Gallagher, Florida's chief financial officer, said he has filed administrative charges against 12 agents and customer representatives of Direct General Insurance Agency for "sliding" ancillary products into consumers' automobile insurance policies without their knowledge or consent, a scheme Gallagher says cost policyholders as much as 44 percent extra on their premiums.

Gallagher, who oversees the Department of Financial Services, said the charges follow an investigation by the department's Division of Agent and Agency Services, Bureau of Investigation, and the Division of Legal Services. Direct General operates more than 100 agencies in Florida doing business as Florida No Fault Insurance, Insurance Options Plus, Friendly Auto, and Cash Register among others.

If the charges are upheld, the licensees could face revocation of their licenses. Gallagher said he will also seek restitution for affected consumers.

"Florida's insurance professionals should be driven by their clients' best interests, not commissions," Gallagher said. "This department will continue to rigorously prosecute agents who violate the law and violate that trust."

According to state officials, those agents charged are Thomas Aquinas McCullom of Gulf Breeze (12 counts); Paula Beckett (four counts) and Roger Dale Scites (seven counts), both of St. Petersburg; Kim Suzanne Velez of Ft. Myers (eight counts); Radcliffe H. McKenzie (12 counts) and Alberta Mitchell (nine counts) both of Sunrise; Katherine Anne Fitzgerald of Zellwood (four counts); Jenny R. Caddell of Middleburg (five counts); and Lekeisha Chavon Paige of Jacksonville (three counts).

In addition to eight counts of sliding, customer representative Cecilia Maus, of Cottondale, was charged with three counts of sliding products she was not licensed to sell, and Marie B. Jean, of Riviera Beach, another customer representative, was charged with eight counts of sliding and two counts of unlicensed activity. Earlier this month, Direct General customer representative Denise D. Turnbull settled sliding and unlicensed activity charges leveled by the department, by agreeing to pay restitution and serving a six-month suspension of her insurance licenses followed by a year's probation.

From Claims Guides (www.claimsguides.com)

USAA Seeks 40% Homeowners Rate Hike in Fla.

USAA Casualty, which primarily insures military personnel and their families, has asked the state to increase its homeowner and condominium premiums by an average of 40 percent.

The company made the request last Friday to the state Office of Insurance Regulation. USAA insures more than 280,000 people in Florida, according to the OIR.

USAA and two of Florida's five largest insurers -- State Farm Florida Insurance Co. and Nationwide Insurance Co. of Florida -- have previously asked to raise premiums because of reinsurance. Reinsurance is insurance coverage for insurance companies, to help pay claims after a catastrophe.

State regulators approved State Farm's rate hike last month. USAA received an average 8 percent rate increase earlier this year.

"Reinsurance plays into the equation, but (the new increase is) also looking at anticipated future losses and rising construction costs,'' said USAA spokeswoman Lynne McChristian.

Reinsurance prices skyrocketed and coverage availability shrank after Hurricane Katrina last year, and the market is unlikely to improve soon, said Bob Lotane, a spokesman for Insurance Commissioner Kevin McCarty.

"That being said, a couple of years of good weather will probably make things a lot brighter,'' Lotane said.

Source: Associated Press (www.ap.org)

From Insurance Journal (www.insurancejournal.com)

Towns Take Aim At Illegal Immigration

By Oren Dorell
USA Today

Lou Barletta says illegal immigrants are overfilling schools in Hazleton, Pa., cramming local health clinics and overrunning the playground where he once played basketball.

Barletta, mayor of the city of 22,000 south of Wilkes-Barre, says illegal immigration is "destroying small towns" that don't have the budget to deal with the influx.

So Barletta proposed a law that fines landlords for renting to illegal immigrants and punishes employers for hiring them. The City Council passed the measure, and Barletta signed it into law last month. To implement it, Barletta wants to require renters to go to City Hall and obtain a permit assuring landlords that they are in the USA legally. That would require a background check with the Bureau of Immigration and Customs Enforcement.

Barletta says that even though the law isn't in effect yet, it's having an impact: "People are leaving daily."

Hazleton's requirements are strict, but other communities also are targeting landlords and employers. A similar law passed recently in Riverside, N.J., and others are being drafted or voted on in several other communities where leaders have complained for months about inaction by federal lawmakers.

"If a byproduct of this is to send out a message and embarrass the people out in D.C., then maybe that's good," says Andy Anderson, a councilman in Palm Bay, Fla. The city of 93,000 is one reading away from adopting a law that would fine anyone who employs an illegal immigrant a minimum of $500.

Similar measures are scheduled for votes in the Pennsylvania towns of Allentown (population 107,000), Shenandoah (5,300) and Mount Pocono (3,000). Local legislators in Gadsden, Ala. (population 37,400), Kennewick, Wash. (61,000), and Escondido, Calif. (134,000), are considering proposing legislation. A bill was narrowly rejected in Avon Park, Fla. (8,900).
Opponents, however, are lining up for a fight in Hazleton.

"This is a test case that will serve as a model for challenges around the country," says criminal defense lawyer David Vaida of Allentown, Pa. He has joined forces with the Puerto Rican Legal Defense and Education Fund and the Pennsylvania chapter of the American Civil Liberties Union and says they are preparing a lawsuit.

"I don't think there was a municipality in the country until this came up that has ever required such a thing," he says. "Have you ever heard of a tenant needing an occupancy permit?"

Kris Kobach, once an immigration adviser to former attorney general John Ashcroft, disagrees. He says it is possible to draft a local ordinance that deals with immigration that will stand up to judicial scrutiny. He has helped several states draft immigration-related bills, including one in Utah that would penalize employers. Four states have passed similar laws this spring: Georgia, Louisiana, Colorado and Pennsylvania.

"States and localities bear a significant amount of the burden for dealing with illegal aliens, but the federal government bears the brunt of enforcing the law," Kobach says. "And when they don't, states and local governments pay the price."

Joseph Turner, an activist in San Bernardino, Calif. (population 199,000), pushed the idea before Hazleton adopted its law. The City Council declined to vote on it, and Turner was unable to gather enough signatures to put it on the ballot. He says passage across the country will "put enormous pressure on the federal government to come up with a solution that will finally solve this problem once and for all."

Barletta, meanwhile, says he has been contacted by officials from 30 towns asking for a copy of Hazleton's law.

From USA Today (www.usatoday.com)

California Imposes New Ethics Regulations on Broker-Agents

The California Department of Insurance has issued a notice informing insurance producers of new ethics regulation requiring all fire and casualty broker-agents and life agents to complete four- hour "ethics approved" course each renewal period starting Jan. 1, 2007. The regulation also requires all personal lines broker-agents to complete a two-hour course every license term.

The new requirement does not increase the total continuing education hours required but rather requires that at least four of those hours must be in an approved ethics course.

The new rule will apply to all agents and brokers whose license term expires on or after Jan. 31, 2007. According to the Department, if a person has already renewed their license in 2006 and subsequently takes the ethics approved class, the class will be counted for their "ethics approved" course for their 2008 license renewal.

Approved ethics continuing education courses are show on the Department's web site: www.insurance.ca.gov.

To review the courses, drop down the "Quick Links" menu and click on "Producer Licensing," then click on "Current Licensee Information," then click on "Continuing Education - Individual Licensee Information." When that page opens, click on "Education Provider and Course Search" and fill in the requested information.

For more information, contact the Producer Licensing Bureau Education Section at 916-492-3064.

From Insurance Journal (www.insurancejournal.com)

Insurance Agent Honored

Bob Little, who owns insurance offices in Beaumont and Banning, has been recognized for professional leadership and advanced knowledge by the Society of Certified Insurance Counselors (CIC), a leading national insurance professional organization.

Little was awarded a certificate, marking more than 15 years of participation as a designated CIC, which requires annual completion of advanced education and training.

"Bob's ongoing allegiance and support of the CIC program is a testament to the value he places on 'real world' education and customer satisfaction," said Dr. William T. Hold, president of the Society of CIC.

From The (Banning, CA) Record Gazette (www.recordgazette.net)

War-Risk Insurance End a Worry for Airlines

By Mark Skertik
Chicago Tribune

The suspected terrorist plot foiled by British investigators underscores the continued need for a federal insurance program for airlines developed in response to the Sept. 11 attacks, according to an aviation consultant at one of the nation's largest insurance brokerages.

Without the coverage provided by the war-risk insurance program, which is set to expire Aug. 31, a catastrophic loss of lives and aircraft due to a terrorist attack "would crater the commercial insurance market," said Wayne Wignes, president of the aviation group for Chicago-based insurance broker Aon.

The Air Transport Association, an industry trade group, has called the program "indispensable" for the nation's carriers.

Commercial liability coverage generally does not cover carriers for most of the losses caused by acts of war. And going without coverage is not an option. The banks and financiers that have pumped billions of dollars into the aviation industry demand carriers have war-risk insurance, as do many foreign countries.

"You need it to respond to a 9/11-type event, for the loss of the airplane, the loss of passengers and any third-party claims," Wignes said.

In addition to offering affordable coverage, the government program brings a necessary sense of stability, said Tim Bonnell Sr., president of PIM Aviation Insurance, a Kansas-based broker.

"There's not the fear that if we had another incident, that the coverage will be canceled," Bonnell said. "The commercial market can issue a seven-day notice that they're getting out of the war-risk. Or they can come back and say if you want to keep your coverage, it's going to cost so much amount more, and we're going to exclude these territories."

The government contracts with carriers such as United Airlines and ATA Airlines for charter flights into Kuwait and other areas. Without the federal insurance program, it could be difficult for some carriers to obtain coverage that would be valid in those areas, Bonnell said.

The cost of devastation caused by terrorists is difficult to forecast, but the monetary toll could quickly reach into the billions of dollars. The suspected bombers arrested this week reportedly had targeted 10 wide-body jets.

The list price on just the aircraft begins at more than $200 million each. The costs associated with loss of human life could be higher. In the aftermath of the Sept. 11 attacks five years ago, Congress created a federal fund to compensate victims' families and shield the airline industry and insurers from potentially crippling lawsuits.

In exchange for agreeing to forgo litigation, families could receive payment from the fund. Some still went forward with lawsuits seeking millions of dollars in damages.

The war-risk insurance program allows U.S.-based carriers to buy insurance from the government. Commercially available insurance costs skyrocketed, and policy terms became more restrictive following 9/11.

The program will expire at the end of the month but can be extended until the end of the year at the discretion of Maria Cino, acting U.S. secretary of transportation. Another extension can be made through 2007, a transportation spokesman said.

"It's going to take Congress to extend it beyond next year," Wignes said.During the past five years, the federal government has collected about $100 million in premiums but has not had to spend any money."

They've never had a payout under this program because this program was introduced after 9/11," Wignes said. "But that also reinforces something: $100 million doesn't do much if there is a terrorist attack, because it's beyond the financial capacity of traditional insurers."

Carriers are behind the renewal effort, as are insurance companies. The only opposition has come from foreign carriers that do not enjoy a similar insurance program in their countries, Wignes said.

"They argue it's a subsidy," he said.

The issue has been raised in talks that U.S. aviation officials have had with some countries about increasing access for carriers, Wignes said.

Bonnell said the insurance industry has supported the government program because no carrier can afford the risk associated with a terrorist attack."We've had a pretty good run the past five years, and maybe some people were starting to think, `Do we really still need this,'" he said. "We'll just look at the events yesterday."

From Chicago Tribune (www.tribune.com)

Living The Dream Life

By Lisa Tindell
Brewton (AL) Standard

The name "Spike" was one Robert T. Maxwell had before he was even born. It's a name that has become synonymous with good business and a great person.

"My father was big into boxing in the Navy," Maxwell said. "It was one of a couple of tough-guy nicknames he thought were good and that's where it came from."

Maxwell said the name has been good for him because it is eye-catching on billboards and such that he uses to advertise his business as an insurance agent.

The State Farm insurance agency Maxwell owns came as a result of an opportunity that presented itself to him back in 1983.

"Before having the opportunity to own the business I enjoyed teaching at T.R. Miller Middle School for over six years," Maxwell said. "It was a good decision and one that has served me well for 23 years."

Maxwell's family moved to the Brewton area in 1957 when his father came to town to help open the paper mill.

"I can remember my first teacher was Mrs. Osborn, who was Patty Mitchell's mom, when I was in the fourth grade," Maxwell said. "We lived in Lynbrook at the time. As a matter of fact, my parents still live in the house where I grew up."

While attending school at T.R. Miller, Maxwell tried his hand a many different things including football and baseball, but found his niche in the band.

"I can remember that I was the last man cut in baseball one year," Maxwell said. "I carried my French horn in one hand and my books in the other and cried all the way home the day I was cut."

Band would serve him well, as it turns out. His musical abilities were well proven as he played trumpet, French horn and baritone in the band. The education in music he received would find itself translated into a great stint in a homegrown rock band.

"I found out that I liked to play music and sing," Maxwell said. "Some friends and I got together and formed a rock band. We went by the name of 'Beat Masters'."

The group was made up of Bubba Bracken, Johnny Byrd, Shon Scott, Freddie Boyce and Maxwell.

"We were told that rock and roll would ruin us," Maxwell said. "But it didn't. Bubba has a master's degree in music education, Johnny is a successful attorney in Plant City, Fla., and has even been Speaker of the House, Shon is a building contractor and Freddie is a successful insurance agent in Birmingham."

Maxwell said while the group played a lot of rock and roll and soul, the rhythm and blues selections they played were the ones he liked best.

"I loved the rhythm and blues numbers better than anything else we played," Maxwell said. "We played some Beatles, Stones and even some Who, but the R&B stuff was what I liked most."

The band was known around the area during 1966 to 1968. Although the group did not make any professional recordings, Maxwell said there are a few tapes and compact discs floating around the area.

The band was just one of the high points in Maxwell's life. He was with the group following graduation from high school and all through his time at Jefferson Davis Junior College.

"We kept the band together until after my graduation from JD," Maxwell said. "It got to be a ittle tough then because some of the band members began commuting which made it hard to practice."

Maxwell himself was among those who would have been on the commuting list. He found himself registered for classes at the University of South Alabama in Mobile..

"I earned my A.A. degree from JD," Maxwell said. "I then went on to college at the University of South Alabama where I earned degrees in secondary education. I received my Bachelor's degree in 1970 and went on to earn my master's degree in 1974."

Earning a master's degree wasn't necessarily the best thing that happened to Maxwell while attending classes at USA.

"The best thing I got at USA was Marsha, my wife," Maxwell said. "We met in 1968 at our first class. She was singing 'Piece of my Heart' while we were waiting for class to begin. I found that intriguing and decided to get to know her."

After marrying, Maxwell came back to Brewton in 1973 when he was offered a teaching position at T.R. Miller High School. He taught at the high school until taking a position at the middle school in 1976, where he remained until he began the agency he now owns.

Leaving the teaching profession did not leave Maxwell with any regrets. His years teaching gave him great experiences and helped him to learn a lot about children and their parents, he said.

"I found out that there are two things that will make people react," Maxwell said. "If you mess with their pocketbook or their children, you have their attention."

Having been raised in a Christian home, Maxwell counts himself lucky.

"I was raised by Christian parents in a Christian home," Maxwell said. "I feel like I'm one of the lucky ones and wouldn't trade it for anything."

Maxwell's work in the church has been extensive over the years. He grew up as a part of the First Baptist Church. He is now an active member at the First United Methodist Church. He has served in many capacities in the church and continues to be active in the fellowship.

"Marsha and I are members of the First United Methodist Church," Maxwell said. "I've done everything at church except preach."

Maxwell has taught Sunday school and served on the Church Council of Ministries.

Not only is Maxwell active in his roles at the church, he likes to spread himself around in community work as well.

"I have been a member of the Lions Club, Kiwanis, and a booster member for bands and sports at T.R. Miller and W.S. Neal schools," Maxwell said. "I was even president of the T.R. Miller Band Boosters for two years."

Maxwell says he likes to share his money and time with the schools in the area. He feels that it is beneficial for all when he helps out.

"Everything I do for the schools is all good for our children," Maxwell says. "It's kind of selfish in a way. I want to be able to hire someone in the future who is able to run the front office when I'm away."

Maxwell says he has a dream job and couldn't imagine much that would be better in his life.

"I own my own business where I am the boss and set my own hours," Maxwell said. "I make a reasonable living and can make time for my family when we have an opportunity to be together. What could be better than that?"

From The Brewton (AL) Standard (www.brewtonstandard.com)

Auto Insurers Take Hit on Judge's Ruling

By Eve Mitchell
Oakland Tribune

Some drivers could start seeing lower auto insurance rates by year's end now that a judge has denied a request sought by the insurance industry to block new rules requiring premiums be based more on driving records than ZIP code.

Consumer advocates hailed Thursday's ruling by Sacramento County Superior Court Judge Loren McMasters. The judge rejected an industry request for a preliminary injunction to stop the new rules that are expected to lead to lower rates for many motorists, especially those in urban areas.

"The decision is a very, very powerful statement in support of Commissioner Garamendi's rules," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights. "The old system is unfair."

McMasters gave insurers until 9 a.m. Aug. 17 to file new rate plans with the state Department of Insurance.

Insurers expect to file an appeal before then to seek a stay of the ruling, said Jerry Davies, spokesman for the Personal Insurance Federation of California.

"We disagree with the court's ruling because the regulations will cause a lot of good drivers to receive higher rates and they will be subsidizing other drivers," he said.

Currently, urban drivers can pay as much as hundreds of dollars more than similar suburban drivers because of where they live, critics say. But it's difficult to say now how much the savings -- if any -- will be under the new rules.

The new rules are designed to carry out Proposition 103, the insurance reform initiative passed by voters in 1988. The rules were approved last month by the California Office of Administrative Law after being adopted in June by Garamendi.

Consumer groups have been pushing for the new rules to replace earlier regulations approved in 1996 by then-Insurance Commissioner Chuck Quackenbush.

Critics of the current system said the existing rules are unfair because they rely too much on a motorist's ZIP code and not enough on Proposition 103's three mandatory rate-setting factors: a person's driving record, number of miles driven annually and years of driving experience.
Insurers will still be able to use driver's ZIP code and several other optional factors such as gender and marital status as long as they are given less weight than the three mandatory factors.

The insurance industry contends the existing system is fair and based in part on risk factors such as higher accident and theft rates in cities. The industry filed the suit seeking to block the new rules, saying they would lead to higher insurance rates for drivers in suburban and rural counties.

But those arguments didn't sway the judge.

In court papers, McMasters noted that a voluntary rating plan submitted last month by the Auto Club of Southern California resulted in reduced premiums for 88 percent of policyholders and an overall 7 percent drop in rates. No more than 1.7 percent of Auto Club policyholders would experience a rate increase exceeding 5 percent, the judge noted.

Since the new regulations were adopted, USAA also has volunteered to base its rates primarily on a motorist's driving records instead of residence.

Those new rates are expected to take effect on Nov. 1., said USAA spokesman Roger Wildermuth.

"These new regulations are the law of the land and we are going to comply with them," he said.
The Personal Insurance Federation contends that USAA and Auto Club of Southern California are not typical insurers because they can refuse to write insurance policies in certain situations, which the federation claims gives them an unfair advantage over other insurers.

Source: Oakland Tribune (www.oaklandtribune.com)

From Insurance News Net (www.insurancenewsnet.com)

Minn. Man Jailed for Driving without Insurance Beaten to Death by Inmate

An Elk River, Minnesota man being held at the Sherburne County Jail on a gross misdemeanor traffic violation died after being beaten by another prisoner, the sheriff's office said Wednesday.
Carl Edward Moyle, 28, had been in jail since Tuesday morning, after being arrested in Elk River and booked for allegedly driving without insurance, authorities said.

Jailers learned of a disturbance in a 15-bed common area at around 9:20 p.m. and found that Moyle had been beaten with a railing, authorities said. He was pronounced dead at a hospital shortly before 10:30 p.m. Tuesday.

Authorities said the suspect was in the county jail awaiting a court date related to an earlier attack at a state prison.

Moyle's family said he was driving his brother's truck to work when he was pulled over and arrested. His family says the proof of insurance was at home in a drawer and not in the glove box.

The victim's brother, Byron Moyle, told KSTP-TV that he brought the proof of insurance to the police department after work on Tuesday, but it was closed.

Family members said the sheriff told them the suspect took a handicap railing off a stall in the bathroom, took it to the cell where Moyle was sleeping with his back turned and beat Moyle to death.

The case remains under investigation.

Source: Associated Press (www.ap.org)

From Claims Guides (www.claimsguides.com)

Brooke Credit Corporation Announces Selected Results for July 2006

Michael Lowry, president and chief executive officer of Brooke Credit Corporation, the finance subsidiary of Brooke Corporation (BXXX), announced selected July 2006 results.

Lowry announced loan portfolio balances for Brooke Credit Corporation on July 31, 2006, totaled approximately $401.4 million, compared to loan portfolio balances of approximately $377.4 million on June 30, 2006. Loan portfolio balances increased as the result of July loan originations of approximately $35.6 million, and decreased from July principal payments of approximately $11.6 million. July originations included $10.4 million in Brooke franchise insurance agency loans, $21.2 million in non-franchise insurance agency loans and $4.0 million in non-franchise death care loans. The company's total loan portfolio is composed of $95.4 million in loan balances held in the company's inventory for future sale, and $306.0 million in loan balances sold to investors with retained servicing rights.

Lowry also announced that, during July, Brooke Credit Corporation received net interest and servicing income of approximately $1.8 million, and incurred operating interest expense of approximately $454,000. Additionally, Lowry announced that, during July, Brooke Credit Corporation incurred a gain on loan sale activities of approximately $3.8 million. The July gain on loan sales primarily resulted from the July 31, 2006, issuance of approximately $52.3 million in asset-backed securities through Brooke Securitization Company 2006- 1, LLC.

All results included within this press release exclude portfolio balances and revenues derived from lending activities with parent and sister companies.

From PR Newswire (www.prnewswire.com)

Senate Bill Would Require Disclosure of Total-Loss Vehicle Data

By Raymond J. Lehmann
A.M. Best Company

Automobile insurers would be required to disclose detailed information about vehicles they have declared total losses under new legislation sponsored by Sen. Trent Lott, R-Miss.

Introduced in response to concerns that thousands of cars destroyed by Hurricane Katrina may be resold without proper salvage titles, the bill directs the National Highway Traffic Safety Administration to insist insurers make information about the vehicles available to the public, either directly or by selling the data to firms that package vehicle-history reports to consumers.

Dubbed the Passenger Vehicle Loss Disclosure Act, S. 3707 would require insurers to disclose in a "reasonably accessible" electronic format the serial numbers or vehicle information numbers of total-loss vehicles, as well as the date of the loss, the cause of the loss, the final odometer reading and whether the loss resulted in an air bag deployment.

The measure would pre-empt state auto title laws that conflict with its requirements and also would provide insurers with safe harbor from liability should the disclosures prompt a breach-of-privacy complaint.

Ben McKay, senior vice president of government affairs for the Property Casualty Insurers Association of America, said PCI and other industry groups have been working with Lott's office to address the issue of salvage title fraud. The group hasn't yet taken a stance for or against the bill, but it is examining whether concerns about disparate state rules and definitions are sufficient to merit federal pre-emption.

"The intent is certainly understandable, but the usual questions arise as to whether there is a need to pre-empt the states in the area of vehicle titles, where the states are the long-standing presumed jurisdiction," McKay said.

According to the National Automobile Dealers Association, which supports the legislation, roughly 5 million vehicles were declared "totaled" by insurers in 2005 because of extensive damage, flooding or theft, including nearly 500,000 cars damaged by Hurricane Katrina. But many of these vehicles subsequently are rebuilt and resold with clear titles.

"This is a double-hit on consumers: it's a public health risk because more unsafe cars are on the road, and it's a pocketbook risk because people could overpay for a wreck that should be in the junkyard," David Regan, NADA's vice president for legislative affairs, said in a statement. "Dealers don't want these wrecks on their lots any more than a mother would want to drive her children around in one."

The National Insurance Crime Bureau, in partnership with 26 leading insurers -- including State Farm, Allstate, Farmers Insurance, Geico, and Progressive, the top five auto insurers nationwide -- already maintains a database of vehicles and watercraft affected by hurricanes Katrina, Rita and Wilma. The NICB makes the data available free of charge through its Web site.

Source: A.M. Best Company (www.ambest.com)

From Insurance News Net (www.insurancenewsnet.com)

Progressive Direct's New Text Messaging Service

The Progressive Direct Group of Insurance Companies today announced its customers can now sign up to receive up-to-date information about their auto insurance policies through text messages sent directly to their cell phones. Customers can opt-in to receive Progressive Direct(R) Mobile Alerts including payment reminders, sent in advance of billing dates; payment confirmations, sent once payment has been received; and other payment information.

"At Progressive Direct, we're always looking for innovative ways to make car insurance as easy as possible for our customers," said Toby Alfred, Progressive Direct customer experience general manager. "A Mobile Alert sent directly to a cell phone makes it easy to know when a payment is due and when it has been made. The beauty of it is the customer gets the information instantly - without having to be connected to e-mail."

Payment reminder Mobile Alerts are available to customers who have their car insurance payments automatically deducted from a bank account or billed to a credit card. These reminders are helpful to customers who want advance notice that a bank account deduction or credit card charge is about to be made. Payment confirmations are available to Progressive Direct customers who pay by mail or through an online bank account. Customers who sign up also will receive Mobile Alerts if their policy is about to be cancelled due to non-payment or they have insufficient funds in their account to cover a scheduled payment. The Mobile Alerts work on all major wireless carriers in the United States. Progressive Direct does not charge a fee for Mobile Alerts, but wireless carriers' standard rates for receiving text messages still apply. Customers can sign up to receive Mobile Alerts by logging in to Progressive Direct's secure and easy-to-use online service site and selecting "E-mail/Mobile Preferences."

The Mobile Alerts are the latest in a long line of innovations from The Progressive Group of Insurance Companies, which includes The Progressive Direct Group. In 2005, Progressive Direct launched a customer service support tool called "Talk To Me" that lets shoppers on progressivedirect.com choose to speak with a licensed sales representative immediately, over the Internet, just by clicking their mouse. With Talk To Me, Progressive Direct became the first major auto insurance group to make Voice Over Internet Protocol (VoIP) technology available to consumers, allowing them to make telephone calls using an Internet connection instead of a regular phone line.

Other recent innovations include the testing of a usage-based insurance discount program in Minnesota called TripSense(R) in 2004 and, in 2002, the launching of the first-ever auto insurance "Rate Ticker" that shows an up-to-the-minute scrolling display of auto insurance rates provided by different companies to consumers across the U.S. Designed to highlight the spread in rates available from different companies, the Rate Ticker won a coveted "Fast 50 Champions of Innovation" award from Fast Company magazine in 2003.

The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance and number one for motorcycle insurance based on premiums written and provides drivers with competitive rates and 24/7 in-person and online service.

The products and services of the Progressive Direct Group of Insurance Companies are marketed directly to consumers under the Progressive Direct(R) brand by phone at 1-800-PROGRESSIVE and online at www.progressivedirect.com and www.progressiveseguros.com, a site for Spanish-speaking consumers. Progressive Direct offers consumers conveniences that help make car insurance easier, including comparison rates of other top companies and the ability to shop for, buy and manage their policies by phone or online, 24/7. The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at (NYSE:PGR). More information can be found at www.progressive.com.

Source: Progressive Insurance (www.progressive.com)

From Business Wire (www.businesswire.com)

Study: Immigrants Not Taking Jobs From Americans

By Stephen Ohlemacher
Associated Press

Big increases in immigration since 1990 have not hurt employment prospects for American workers, says a study released Thursday.

The report comes as Congress and much of the nation are debating immigration policy, a big issue in this fall's midterm congressional elections.

The Pew Hispanic Center found no evidence that increases in immigration led to higher unemployment among Americans, said Rakesh Kochhar, who authored the study.

Kochhar said other factors, such as economic growth, played a larger role than immigration in determining the job market for Americans.

The study, however, did not look at whether wages were affected by immigration. Advocates for tighter immigration policies argue that immigrant workers depress wages for American workers, especially those with few skills and little education.

Immigration supporters argue that foreign workers often take jobs that Americans don't want and won't take.

The Pew Hispanic Center is a non-partisan research organization that does not advocate policy positions. The center studied census data on the increase in immigrants from 1990 to 2000, and from 2000 to 2004, for each state. It matched those figures with state employment rates, unemployment rates and participation in the labor force among native-born Americans.

The U.S. had 28 million immigrants — legal and illegal — age 16 and older in 2000, an increase of 61% from 1990. By 2004, there were 32 million.

Among the study's findings:

•Twenty-two states had immigration levels above the national average from 1990 to 2000. Among them, 14 had employment rates for native-born workers above the national average in 2000, and eight had employment rates below the national average.

•Twenty-eight states and the District of Columbia had immigration levels below the national average from 1990 to 2000. Among them, 16 had above-average employment rates for native-born workers in 2000, and 13 had below-average employment rates.

•Twenty-four states had immigration levels above the national average from 2000 to 2004. Among them, 13 states had employment rates for native-born Americans above the national average in 2004, and 11 had employment rates below the national average.

•Twenty-six states and the District of Columbia had immigration levels below the national average from 2000 to 2004. Among them, 12 had employment rates for native-born Americans above the national average, and 15 had employment rates below the national average.

Immigrants tend to be younger and have less education than American workers. The study, however, found "no apparent relationship between the growth of foreign workers with less education and the employment outcome of native workers with the same low level of education."

However, Steven Camarota, director of research for the Center for Immigration Studies, said his research shows that many young workers with little education are hurt by competition from immigrants.

"Employment for less educated natives has declined, and their wages have declined," said Camarota, who advocates stricter immigration policies. "There is no shortage of less educated workers in the United States."

Source: Associated Press (www.ap.org)

From USA Today (www.usatoday.com)

AIG Reports 29% Drop in Earnings

American International Group (AIG), one of the world's largest insurance companies, said Wednesday its net income fell 29% in the second quarter from a year earlier despite growth in its general insurance and life insurance divisions.

The New York-based company said net income in the April-June period totaled $3.19 billion, or $1.21 a share, down from $4.49 billion, or $1.71 a share a year earlier.

Adjusted for capital gains and hedge accounting rules, net income was $4.16 billion, or $1.58 a share, in the second quarter compared with an adjusted income of $3.28 billion, or $1.25 a share, in the second quarter of 2005.

Revenue was $26.74 billion, down slightly from $27.9 billion a year earlier.

Analysts surveyed by Thomson Financial had projected second-quarter earnings of $1.39 per share on revenue of $29.2 billion.

The earnings report was issued after the market closed. AIG shares fell $1.19, or nearly 2%, to $58.49 in regular trading Wednesday on the New York Stock Exchange and fell 49 cents more in after-hours trading.

The shares have traded in a range of $57.52 to $71.09 in the past year.

Martin J. Sullivan, AIG's president and chief executive, said in a statement accompanying the report that the quarter's performance reflected the strength of AIG's business diversification.

"General insurance posted record underwriting profits," he said. "Net premiums written increased across the board, and our general insurance operations are well-positioned to capitalize on opportunities in the current market environment."

He said the performance of the life insurance and retirement services division was mixed, "including strong production results in the domestic life insurance ... with an ongoing difficult sales environment in individual fixed annuities."

Operating income in the general insurance division was $2.99 billion, up nearly 70% from the second quarter of 2005, the company said. Life insurance and retirement services, meanwhile, posted operating income of $2.61 billion, up 9.7% from the year-earlier quarter.

Income in the asset management business also rose, but operating income in financial services fell after accounting adjustment and weaker credit conditions in the United States and some foreign markets, including Taiwan.

Net income for the first six months was $6.39 billion, or $2.43 a share, down from $8.29 billion, or $3.16 a share, in the first six months of 2005.

AIG said its consolidated assets were $900.67 billion as of June 30, and shareholders' equity was $87.71 billion.

Source: Associated Press (www.ap.org)

From USA Today (www.usatoday.com)

Ca. Employers Focus More on Diversity, Online Benefits Tools

California employers were more concerned in 2005 than the rest of the country with workplace diversity and work/life balance, according to a survey released Wednesday.

The 2005 Employee Benefits Trends Study by MetLife showed that 37 percent of the state's employers see work force diversity as a top priority, compared with 29 percent of employers nationwide.

And an approach that balances work and life is adopted by 58 percent of California employers, compared with 52 percent of their peers nationwide.

"More than employers in other states, California employers strive to truly understand their employees' diverse needs in order to create the most appropriate benefits packages," said Randy Stram, vice president of institutional business for MetLife. "While many companies nationwide still continue to offer a one-size-fits-all benefits package, California employers are taking extra steps to maximize benefits satisfaction and return-on-investment."

Customized options may be a major reason why 43 percent of California employees say they are satisfied with the benefits provided through their employers, compared to 39 percent of their counterparts nationwide.

In addition, 36 percent of Californians said benefits offered by their employers are an important reason why they went to work for their employer, compared to 31 percent of employees in the rest of the country.

More companies in California, or 32 percent, believe it is extremely or very important to offer benefits communications, enrollment and services in a language other than English, versus 26 percent of employers nationwide.

Among the other California-specific key findings from the study: 83 percent of California employers provide their employees with Internet/Intranet access compared to 74 percent across the nation; of employers who do not currently offer online benefits enrollment, 62 percent of those in California plan to add this option over the next 18 months compared to 37 percent of employers nationwide.

The MetLife survey polled 1,213 full-time employees, age 21 and older, at companies with at least two employees. The employer survey consisted of 1,514 interviews with benefits decision-makers at companies with at least two employees.

New York-based MetLife is a subsidiary of MetLife Inc.

From Silicon Valley/San Jose Business Journal (www.bizjournals.com)

Calif. Approves USAA's 8 Percent Auto Rate Reduction, Insurers Not Surprised

California Insurance Commissioner John Garamendi announced that he intends to approve an average 8 percent decrease in premium rates for policyholders of United Services Automobile Association (USAA), a move that the commissioner said coincides with the company's decision to implement what he is calling the Garamendi Good Driver Auto Insurance Reforms.

Garamendi signed a giant check for $32.7 million to USAA Insurance auto policyholders at a news conference on a traffic island near the State Capitol yesterday. USAA has agreed to cut auto insurance rates for 318,000 California policyholders, who will see an average savings of $103 per year in annual premiums.

Garamendi said USAA's decision is proof that his newly imposed auto rate regulations are beneficial for consumers while feasible for insurers. Sacramento's Superior Court is scheduled to make a decision today regarding the insurance associations' lawsuit to stop implementation of Garamendi's new rules.

However, the Peronsal Insurance Federation of California said USAA's filing was not a surprise and noted USAA would act differently than other insurers because it receives special treatment under Proposition 103.

"Unlike other insurers who must accept all good drivers, USAA is not required to 'take all comers,'" said Rex Frazier, PIFC president. "They can refuse to write insurance for any good driver who is not connected to the military and, therefore, USAA does not have customers broadly spread across the state like other companies subject to Proposition 103. So, they are not affected by the Commissioner's subsidy proposal like other insurers," he said.

Garamendi's reforms were approved by the state's Office of Administrative Law last month. It requires that insurers give more weight to three mandatory factors noted in Proposition 103 -- safety record, mileage driven and driving experience -- over any other rating factors. Insurance associations, however, are fighting the rules, saying they are not based on actuarial data and will increase rates for drivers in rural areas, causing some drivers to subsidize others' rates.

"USAA has done the right thing for its policyholders," said Commissioner Garamendi. "Once again, a major company has chosen to break from the ranks of those companies who inexplicably continue to fight the will of Californians who approved Proposition 103. USAA's customers, both rural and urban, will now reap the benefits."

USAA is scheduled to file a new rating plan with the Department of Insurance to begin its adoption of the reforms and lower its rates Wednesday. The process will take roughly 45 days to complete.

"California is the latest in a series of states where we've been able to cut rates for our members," said Joe Wehrle, president of USAA Property and Casualty Insurance Group. "Particularly in California, where drivers are paying over $3 for a gallon of gas, USAA's auto rate cuts will come as good news."

The Sacramento Superior Court is scheduled to hear arguments at 2 p.m. today on the insurance industry's lawsuit requesting a temporary injunction to stop the August 14 deadline for all California insurers to submit new auto insurance rating plans to Insurance Commissioner Garamendi's Department of Insurance.

Source: California Department of Insurance (www.insurance.ca.gov)

Source: Personal Insurance Federation of California (www.pifc.org)

From Insurance Journal (www.insurancejournal.com)

New Homeowners Provider Poised to Enter S. Florida Market

Northern Capital Insurance Co. will enter the homeowners insurance marketplace in Florida and begin writing policies on or about Aug. 15, according to Wayne Fletcher, president of the Miami, Fla. firm.

"Northern Capital Insurance Company is a Florida based corporation and was formed in response to the growing homeowners' insurance crisis in Florida, particularly in the southern third of the state," Fletcher explained. "Many insurance companies are withdrawing from the state and those remaining are limiting their aggregate liability by non-renewing policies.

Fletcher said several factors will be the keys to Northern Capital's success:

* Initially, Northern Capital's strength and financial stability will enable it to protect a few thousand Florida homeowners and their property. As it builds surplus the company will be able to provide several thousand homeowners with insurance for years to come.

* Fletcher believes homeowners insurance is still a relationship business and will focus on building relationships with agency partners who represent the policyholder.

* Northern Capital's management team has years of experience working in the insurance industry and possesses the skills required to deliver a quality product and the expertise to maintain a lasting organization.

* It will use state-of-the-art technology; follow the highest standards of conduct and provide fair and timely claims handling to deliver the best customer service in the state of Florida.

"Northern Capital will initially focus its efforts on insuring homes in about 10 counties in the southern part of Florida and as the company grows, it will expand into other regions of the state," Fletcher concluded.

According to Fletcher, Northern Capital has put together a reinsurance program comprised of U.S. and Lloyd's of London reinsurers, in addition to the protection provided by the Florida Hurricane Catastrophe Fund. He said all of the reinsurers backing Northern Capital Insurance Company have a financial stability rating from A.M. BEST of "A" or better.

Source: Northern Capital Insurance Co. (www.northerncapital-mn.com)

From Insurance Journal (www.insurancejournal.com)

Safer Cars, Not Better Drivers, Behind Fewer Roadway Deaths

The designs of passenger vehicles have been improving for years, becoming more protective of their occupants in crashes. Without these improvements, the motor vehicle death rate per registered vehicle would have stopped declining in 1994 and started going up. This is the main finding of a study by the Insurance Institute for Highway Safety.

"Death rates per vehicle and per mile have been going down for decades, and they still are. This study shows why," says Institute president Adrian Lund. "In recent years it's the vehicles, not better drivers or improved roadways. The study reveals not only the importance of the vehicle design changes and the kinds of vehicles
motorists are choosing to drive but, on the downside, the loss of momentum for effective traffic safety policies on belt use, alcohol-impaired driving, and speeding."

The researchers separated vehicle effects from other effects on motor vehicle death rates during 1985-2004 by estimating what the death rate trend would have been if vehicle designs hadn't changed over the years; that is, if people still were driving the kinds of vehicles they drove in 1985. The death rate trend given this hypothetical vehicle fleet started to go up in the 1990s, which is very different from the actual downward trend during the past 10 years.

"This suggests that an increasingly dangerous traffic environment has been offset since 1994 only because people are driving vehicles that are more protective," Lund points out. "Of course the vehicle design changes are good, but people shouldn't have to buy new, more crashworthy vehicles to maintain their safety. Our concern is that the efforts we had been seeing in the 1980s to mandate belt use and toughen DWI laws diminished in the 1990s at the same time that states were raising speed limits. This produced an increasingly dangerous traffic environment. It has become dangerous enough that, without the design improvements that have made vehicles more crashworthy, death rates would have started up. An estimated 5,200 additional lives would have been lost in 2004 without the vehicle design changes."

To clarify what has been making deaths per registered vehicle go down, Institute researchers focused on two factors that influenced the driver death rate during 1985-2004. One is how vehicle use patterns change as vehicles age. The other is vehicle design changes -- the introduction over time of different types of vehicles and more crashworthy ones to replace vehicles that weren't doing as good a job of protecting their occupants. In the U.S. fleet these two factors can have countervailing influences. As vehicles age, their death rates go up. On the other hand, more crashworthy vehicles have been introduced, and their death rates are lower than in the older vehicles they replaced. Plus the types of vehicles in the fleet have shifted, and the shift from driving cars to SUVs can change the death rates.

The researchers computed death rates for vehicle models that didn't change in design over three model years, 1996-98 models during 1999, for example. This eliminated the effects of any design changes on the death rate because there were no such changes. Computing the rates for several model year groups without design changes during individual calendar years, the researchers found that, on average, the death rate per registered vehicle increased 1 to 5 percent in each year of the first 7 years on the road.

Then the researchers separated out vehicle design effects on death rates by following the same vehicles over time. The rates still were affected by vehicle aging so, having already estimated the age effects, the researchers factored them out too. This is when the data revealed that the downward trend in death rates would have ended in the early 1990s. An upward trend would have begun if not for the changes in vehicle designs.

"The downward trend in death rates even as speed limits were being raised on U.S. roads led some speed advocates to argue that posted limits don't matter," Lund says. "But our research shows that speed limits do matter because, once we adjusted for vehicle age and design, what became clear are the escalating dangers of everyday traffic. We have serious problems out there with faster travel speeds, and we need to address these problems with effective policies. Of course, we also need to continue to improve vehicles because right now this is the main protection in crashes associated with unchecked driving behavior like speeding."

The research report, "Trends over time in the risk of driver death: what if vehicle designs had not improved?" by C.M. Farmer and A.K. Lund will be published in the journal, Traffic Injury Prevention, later this year.

Source: Insurance Institute for Highway Safety (www.iihs.org)

From Insurance Journal (www.insurancejournal.com)

Insurance Rate Cuts? Here's the Lowdown

By Ralph Vartabedian
Los Angeles Times

The automobile insurance industry and California Insurance Commissioner John Garamendi have entered a significant legal battle over how to be fair to you.

At issue is how to set insurance rates in a reasonable and nondiscriminatory way, a matter so technically complex that it defies imagination, but not politics.

In California, an almost incomprehensible mix of factors is used to set rates, which are supposed to reflect an insurer's risk.

Some of these factors seem bizarre: whether you smoke, the kinds of grades teenagers get, whether you are married, the size of your car's engine and, of course, your gender. Then there are group discounts for people such as teachers and engineers, who are viewed as more desirable customers than politicians or journalists. Insurers use more than a dozen of these markers.

But these are secondary factors that usually don't count very much.

What counts more are three mandatory factors: your driving record, how many miles you drive each year and your years of driving experience. Good drivers, not too young or old and with small commutes, get a break.

But what counts even more — the real ace of spades — is where you live. City drivers pay more than people in rural areas; those in dense urban neighborhoods pay more than those in the suburbs. Sometimes, people on one side of a street have significantly higher rates than those on the other.

"It is redlining," Garamendi said, referring to a practice that has often targeted minorities for higher rates.

Under a major policy change that Garamendi is implementing, auto insurers will have to substantially deemphasize ZIP Codes and make a person's driving record, years of experience and annual mileage the most important factors in setting rates.

It holds the promise for lower rates for dwellers in Los Angeles and much of Orange County, as well as San Francisco. But it would penalize drivers in rural communities like Bishop, which currently has some of the lowest rates in the state.

Insurers say these ZIP Code rating schedules accurately predict claims, because people in urban areas drive on roads that are more crowded and dangerous, they are more likely to be involved in staged accidents and are at greater risk of having their car stolen or vandalized. Insurers say it hits all motorists equally, putting residents of Inglewood and Beverly Hills in the same boat, as well as many drivers in more ethnically mixed communities.

"We don't know if a policyholder is black, Asian American or Latino," said Pete Moraga, a spokesman for Allstate Insurance. "We don't ask."

Allstate is one of the insurers behind a suit to block the reforms. Why?

"It is a matter of fairness to our policyholders," Moraga said. "There are high concentrations of minorities in some rural areas. Are we now going to be forced to raise their rates?"

Garamendi said the insurance industry's ZIP Code system defies logic — what is a high-risk ZIP Code to one company is low-risk to another.

But companies seldom do things the same way. That's why Toyotas are different from Hondas. Individual insurers say they are the ones bearing the risk, not Garamendi.

Sometimes, ZIP Code ratings specifically burden minority neighborhoods, says Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, a Santa Monica group that pushed hardest for the new policy.

"As you drive north on Vermont, as soon as you cross El Segundo Boulevard, your insurance rates go up $500 a year for basic insurance," Heller said, referring to south Los Angeles.

One downside of the new policy is that premiums will go up more if a driver gets a ticket, regardless of whether they get into accidents. The same goes for younger drivers and motorists with long commutes. You can bet the new policy will create a whole new class of angry consumers.

Just how much the world will change if Garamendi withstands the legal challenges is not clear.

The Automobile Club of Southern California broke ranks with the industry and adopted Garamendi's formula for setting rates.

A spreadsheet supplied by the insurer shows a married couple with a 5-year-old Camry and a 3-year-old Odyssey, driving 15,000 miles per year on each vehicle, would pay $2,358 living in Inglewood, a reduction of 16% from before. The same family in Woodland Hills would pay $2,323, a reduction of 4%. Such a family in Anaheim would pay $1,743, a reduction of 3.6%; in Escondido, $1,616, a drop of less than 1%.

What this seems to show is that ZIP Codes still matter, but perhaps less than before. While residents of Inglewood would get a $500-per-year break and be on a par with Woodland Hills, residents of Anaheim, also racially and ethnically diverse (one-third white, two-thirds minority) have premiums that are substantially less than either place.

The insurer did not supply a spreadsheet for communities where rates would go up. But more than 10% of its customers will be hit with rate increases. Spokesman Jeff Spring said rates on average would go up about 4% in Bishop, for example.

One bright spot is the potential for lower overall average rates. In the last two years, the percentage of premiums paid out for claims in the state has fallen.

Indeed, the Auto Club's decision to follow Garamendi's policy was eased by the fact that the insurer also had a $133-million across-the-board rate cut for its 1 million policyholders in the state. Location-related cuts for some didn't need to be offset by increases for others.

"We are in an era of price reductions," Garamendi said.

From Los Angeles Times (www.latimes.com)

USAA to Base Premiums on Drivers' Experience

By Marc Lifsher
Los Angeles Times

A second California insurance company broke ranks with its bigger competitors Tuesday and said it would base its premiums on a person's driving record and experience, not where a car is parked.

USAA, the state's ninth-largest automobile insurer, said it would cut rates for 318,000 California customers by an average of 5%, lopping about $100 off their annual premiums. The combination of general discounts and the new rating formula could reduce rates for at least 75% of its members in California, the San Antonio-based company said.

Most of the reductions would go to drivers in Los Angeles, San Diego, San Francisco and Sacramento, USAA said. Last week, it announced that homeowners' premiums would drop by an average of 22%. USAA insures active and retired military members and their extended families.

"California is the latest in a series of states where we've been able to cut rates for our members," said Joe Wehrle, president of USAA Property and Casualty Insurance Group. "Particularly in California, where drivers are paying over $3 for a gallon of gas, USAA's auto rate cuts will come as good news."

USAA's decision to stop using geography as its primary risk factor in setting premiums follows a similar move in July by the Automobile Club of Southern California. Both companies are complying with new regulations issued by state Insurance Commissioner John Garamendi.

California's other leading auto insurers, led by Farmers Insurance Group, State Farm Fire & Casualty Co. and Allstate Corp., are challenging the commissioner's rules in state court, contending that they are arbitrary. A hearing on a request for an injunction is scheduled for Thursday in Sacramento County Superior Court.

The commissioner said Tuesday that a judge was unlikely to grant an injunction now that two auto insurers have filed rating plans that cut rates and comply with the new regulations.

"Automobile insurance prices are coming down, and good drivers are being rewarded," Garamendi said.

Premium reductions by USAA and the Auto Club reflect the peculiarities of those companies' customers and have no bearing on the fairness of the new rules, said Nicole Mahrt, a spokeswoman for the American Insurance Assn.

The group said Garamendi's regulations would raise premiums for 60% of the state's drivers living in suburban and rural communities.

From Los Angeles Times (www.latimes.com)

Insurance Poll Reveals Misconceptions about Renter's Insurance

Every year Washington residents end up with millions of dollars in uninsured losses that could be prevented. According to a poll commissioned by PEMCO Insurance based in Seattle, there is widespread misunderstanding of what is covered under a renter's insurance policy.

The poll, which surveyed 600 residents statewide, indicates slightly more than half of the renters in Washington opt to forgo renter's insurance despite national statistics that show rented households are burglarized at rates 79 percent higher than residents who own property.

"Our poll revealed many renters don't have a complete picture of the coverage they have outside of a renter's policy," said Jon Osterberg, PEMCO spokesperson. "One of the most troubling aspects is that many renters in Washington think they have coverage from other sources when, in fact, they don't."

According to the poll, 6 percent of those who do not have renter's insurance think their landlord's policy will cover their personal belongings. Thirty-three percent of respondents cited the reason they don't have renter's insurance is because it's too expensive, while 27 percent said they don't have enough property to warrant a renter's policy.

A renter's policy protects a tenant's personal property, and it offers liability protection in case someone gets hurt while at the insured location.

"A landlord protects only his interest in the property -- that typically means structural damage to the property is covered, not the tenant's personal belongings," Osterberg said.

Renters with a policy might be surprised to learn they have more coverage than they think. Only 28 percent of poll respondents with a renter's policy understand that most personal property in their car is also covered under a renter's policy.

According to the U.S. Department of Justice, theft from a motor vehicle occurs at almost twice the rate for renters than for those who own their home.

While an auto policy will only cover what is attached to the vehicle, items such as a laptop are protected under a renter's insurance policy.

As an example, Joy Portella, a 34-year-old Seattle resident, recently moved to the area. One morning, she discovered one of her car windows was broken.

"I found an unexpected surprise; it was a basketball-sized rock sitting in my passenger seat," Portella said. "The night before, I left a Nordstrom gift box sitting in my car that probably looked attractive."

Portella later found out that her auto policy would not cover her personal items that were stolen.

"I did not know my auto policy would not cover this, but a renter's policy would if I had one," said Portella. "It isn't anything I gave much thought to, but now wished I had."

Unfortunately, Portella is not alone. PEMCO's poll data showed that only 45 percent of renters have a renter's insurance policy.

"Most people dramatically underestimate the value of their household belongings," said Osterberg. "The average renter has more than $20,000 in possessions, and in the case of a fire or other significant insurable event that can destroy an apartment, that can be a big blow without insurance."

Personal property protection under a renter's policy covers furniture, appliances, clothing, and household goods from fire, theft or vandalism. Other items such as jewelry, furs, guns, silverware, computers, and business equipment are also covered, but have special limitations.

"Renters can expect to pay around $10-$13 a month, or $130-$160 annually for about $40,000 of property coverage," said Osterberg. "In many cases, when consumers have an auto policy, or any other policy with the same insurance company, they'll get a discount that partially offsets the cost of the renter's policy."

Consumers can see how their perceptions of renter's insurance compare by visiting www.pemco.com, where complete results of the PEMCO Northwest Insurance Poll are posted.

PEMCO Insurance commissioned the independent, statewide survey that asked Washington homeowners several questions about home maintenance and other issues.

Informa Research Services Inc. of Seattle conducted the poll. The sample size, 606 respondents, yields an accuracy of +/- 4 percent at the 95 percent confidence level.

Source: PEMCO Insurance (www.pemco.com)

From Insurance Journal (www.insurancejournal.com)

Some Utah Legislators Plan Measures on Illegal Immigration

Some Utah lawmakers are thinking about measures to crack down on illegal immigration.
Ideas include holding employers accountable for hiring illegal immigrants, requiring proof of citizenship or legal status to receive state services and sending illegal immigrants convicted of crimes to privatized prisons.

There also likely will be renewed effort to repeal the law granting in-state tuition to illegal immigrants who attend and graduate from Utah high schools.

They also could took aim at the law that allows illegal immigrants to drive and obtain insurance using a driving privilege card.

Gov. Jon Huntsman has not been briefed on the new proposals, and will evaluate each on its own merits, said Mike Mower, the governor's spokesman. Huntsman continues to support keeping the tuition law and the driving privilege card in place, Mower said.

Rep. Karen Morgan, D-Cottonwood Heights, who is running for re-election, originally supported granting in-state tuition to illegal immigrants but has now changed her mind. She also is looking at proposals similar to some passed in Colorado. One requires people to show identification to access state services and another calls for the state attorney general to sue the federal government over inaction on immigration reform.

"As it is now, the federal government is doing nothing,'" Morgan said. '"When we have a federal government doing nothing, I feel a responsibility as a legislator to look into the issue and see what can be done."

Her Republican opponent, Robyn Bagley, promises to take a tough stand when it comes to illegal immigration, if elected.

"Definitely we have got to repeal in-state tuition" for undocumented students, she said. "We have got to make employers accountable ... non-emergency medical care should not be covered."

Morgan said she'd like to see bipartisan support behind any illegal-immigration measures, but House Minority Leader Ralph Becker, D-Salt Lake, said he is not aware of any other Democrats shifting their positions.

Michael Clara, co-chairman of the Utah Hispanic Legislative Task Force, questioned the constitutionality of requiring people to carry proof of citizenship or legal status.

"I think it's a violation of the Fourth Amendment to require people to carry proof of citizenship," Clara said. "The next step is, who are you going to ask for proof of citizenship? That's going to be brown-skinned people. You can't tell if someone's a citizen by his skin color."

The Sargent Shriver National Center on Poverty Law has filed a federal court lawsuit in Chicago challenging a new law requiring proof of citizenship to obtain Medicaid or Medicare services.
Rep. Glenn Donnelson, R-North Ogden, plans to seek repeal of in-state tuition for and driving-privilege cards for illegal immigrants.

Donnelson also has indicated he plans again to try requiring businesses in Utah to verify new hires' eligibility to work in the United States.

Rep. Paul Ray, R-Clearfield, has opened a bill file to deal specifically with illegal immigrants who are serving time for crimes committed here.

Ray hopes to find a way to contract with a private prison to house out of state or out of the country many of the illegal immigrants who committed crimes in Utah.

There were 260 inmates with a deportation hold in Utah's prisons, from 32 different countries, on June 12, according to a Department of Corrections report. Mexico was the largest nation of origin, with 219 inmates.

Ray said the idea could potentially save taxpayers' money. It costs about $23,000 a year to house an inmate in Utah.

"You might have to pay $1,000 for a plane ticket," he said. "But if it costs $30,000 to house them here, and $15,000 to send them to their home country, it's worth taking a look at."

The Utah Minuteman Project is looking for a lawmaker to sponsor a bill that would require law enforcement officers to check immigration status during traffic stops.

Source: Associated Press (www.ap.org)

From Insurance Journal (www.insurancejournal.com)

Insurance Prices Continue Downward Trend

Composite insurance rates dropped again in July—by 7 percent—though a few lines showed upward trends, according to a monthly report from an online insurance exchange.

The lowering price trend was detailed by Dallas-based MarketScout in its monthly market pricing barometer.

Over the past three months the company noted rates have fallen 5, 6 and 7 percent consecutively.

While the majority of individual lines were down anywhere from 1 to 8 percent, directors and officers liability and fiduciary were flat. Commercial property was up 2 percent, and business income and crime were up 1 percent, according to MarketScout.

By industry class, manufacturing, contracting and service sectors were down 5 to 8 percent, while habitation, public entity and transportation markets were up 1 to 5 percent. Energy showed the highest increase at 8 percent.

The company said its analysis, based upon pricing through its online transactions, is a composite index and individual risks vary based upon underwriting criteria, risk profile, industry group and geographic location.

Richard Kerr, chairman and chief executive officer of MarketScout, commenting on the results, said, “Underwriters are getting smarter because they have better information tools to analyze risks.

“As technology has evolved, insurance and reinsurance companies are utilizing improved techniques to more appropriately price each account. Improved catastrophe modeling provides more accurate data, enabling underwriters to price each risk based upon its own unique characteristics.”

He said technology is allowing insurers to create “micromarkets” where rates vary significantly based upon geographic location, profile and industry class of each risk.

While insurers have always assessed higher rates for catastrophe-prone areas, technology has developed new rating methodologies, which give insurers a better feel for what types of accounts suffer more severe losses, said Mr. Kerr.

He also noted that insurers are using mapping software that allows them to track wind-exposed risks and keeps them from becoming overweight in any one catastrophe-prone area.

From National Underwriter (www.nationalunderwriter.com)

Progressive Direct Makes It Easy for Fair Goers to Fill Up

The Progressive Direct Group of Insurance Companies makes it easier to endure the pain at the pump and enjoy the Champlain Valley Fair this summer. Vermont's fourth largest auto insurance group and title sponsor of the fair is giving away more than $20,000 in free gas cards, helping hundreds of fair goers fill up on more than just corn dogs at this year's event.

People will have plenty of chances to win. On opening day, Saturday, August 26, more than 20,000 Spin-to-Win contest cards will be handed out to fair visitors over the age of 16. Each card will feature an eight-digit alpha-numeric code; participants will then log on to www.progressive.com/fair, enter the code and see if they're an instant winner. People can also retrieve a code and enter the contest simply by visiting the Web site. Progressive Direct will award 700 instant-win gas card prizes worth $20 each. All participants who log on and enter the code will also be entered into a drawing to win one of two grand prize $500 gas cards.

Also, people can register to win one of 200 gas cards valued at $20 each and two grand prize $1,000 gas cards by visiting participating new and used car dealers in the area.

"We've conducted surveys in the past that have shown that drivers change their driving habits as a result of high gas prices, such as taking short day trips instead of driving to a destination farther away," said Cathy Wilton-Bransch, product manager, Progressive Direct. "Just like we make it easy to shop for, buy and own a car insurance policy we want to ease the burden high gas prices have on local drivers and give people another reason to visit this year's Champlain Valley Fair."

In addition to the more than $20,000 in free gas cards, Progressive Direct is also hosting two additional online contests giving people the chance to win free VIP parking passes, general admission tickets and premium seats to some of the Fair's featured events including the Tractor Pull, Figure 8 Motorcycle Racing and Demolition Derby as well as concerts and performances by country superstars Keith Urban and Rascal Flatts, and Blue Collar Tour's funny man Larry the Cable Guy, among others. These online contests will run from July 13 through August 20, 2006; log on to www.progressive.com/fair for more details.

Source: Progressive Insurance (www.progressive.com)

From Insurance News Net (www.insurancenewsnet.com)

Cutting Back on Insurance Can Prove Unwise

By C. Richard Cotton
Birmingham Business Journal

Insurance. It might as well be a four-letter word. For anyone running a business, about to open a business or even just thinking about opening a business, insurance is indeed a four-letter word. It's a "must."

One serious injury suffered by a customer or a contract oversight made by a company officer can literally cost the exposed business tens or hundreds of thousands of dollars, or even more.

Mark Landers has a passel of stories to tell; the senior vice president and managing director of J. Smith Lanier & Co. relates incidents that have happened in hospitals, and they're not malpractice or specifically health issues.

The incidents, which can translate to businesses other than hospitals or similar institutions, underscore the need for coverage in some areas that many businesses don't think of.

"There are risks that people don't realize," Landers says. One of those areas, especially for hospitals, is the need to be covered by managed-care liability.

Not all the problems with liability happen as a result of medical treatment. Hospitals and other clinics, for example, are liable for behavior of their employees, including physicians, who sometimes succumb to the temptations that plague all facets of society.

"It ranges from crack addiction to bad tempers," Landers relates. He points out that if a physician becomes addicted to drugs - and it does happen - the medical facility can be liable for mistakes he might make while high.

Virtually all businesses can end up in the same boat when it comes to a broad range of issues. Landers says a growing segment of business insurance is employment-practice liability, which offers financial protection from lawsuits based on discrimination, harassment and wrongful termination.

"It was formerly only (purchased) by large corporations like General Motors but now we recommend it for smaller businesses," Landers says.

The mainstays of commercial insurance - property and casualty coverage, general liability, malpractice for professionals and various other more specialized policies - are alive and well.

Like most insurance professionals, Bubba Bates, president of Irondale-based Bates & Byrne Insurance Inc., figures that most businesses don't carry enough insurance. They cut back in that arena, he figures, because it's a way to save money.

Nearly three-quarters of the agency's policies are written on commercial endeavors, while the remainder comprises personal policies: "We used to write health insurance but have gotten out of that arena," Bates states. "Health insurance is just a bad area."

Bates points to the volatility of the medical industry as a catalyst for the firm to exit that facet of insurance. Many health-care carriers seem to be functioning with a siege mentality as rising medical costs force ever-increasing premiums and decreasing benefits.

In the realm of commercial insurance, there is no secret that premium costs are higher for some coverage. Bates says that property insurance is a good example. Storms, fires and other calamities not only damage and destroy private residences, they wreak havoc on commercial enterprises, too.

"Construction costs have risen so much that replacement costs are higher," says Bates. Steel, concrete, lumber and the simple act of trucking those goods from producers to users have practically gone through the roof.

Kelly Byrne, vice president of the agency, says that attorney offices are good examples of commercial enterprises that tend to be underinsured: "The content limits are often overlooked," he explains.

Contents of offices generally include high-tech equipment such as computers and high-dollar printer/copiers down to chairs and wastebaskets, all of which cost money to replace in the event of a major incident such as fire.

Byrne points out that companies should also be aware of their vehicular exposure, when company-owned cars and trucks are operated by company employees. Additional coverage may be a consideration since companies, with the public's inherent perception of deep pocketed firms, are a popular target for liability lawsuits.

Landers points out that many companies - start-up construction companies, for example, one of his firm's specialty areas - begin operations using the owners' personal vehicles.

Bates points out that a firm's exposure also is increased when an employee uses his own vehicle to perform company tasks like making a bank deposit during his lunch break. And that brings up the possibility of needing added coverage if night deposits are made; those after-dark missions tend to include a higher-than-usual risk of being robbed.

"One overlooked area," says Bates, in the theft vein and particularly for retail operations, "is employee dishonesty." He says those retailers should be insured against the theft that seems an inevitable part of endeavors that sell products to the public.

"The most important thing," Byrne comments, "is to do a periodic review, maybe every other year, of your operation."

From Birminigham Business Journal (www.bizjournals.com)

Aon to Quit as P-C Insurer, Focus on Life, Accident

By Mark E. Ruquet
National Underwriter

Management of Aon Corp. insurance brokerage said today it intends to get out of the property-casualty underwriting business, selling off its warranty and some specialty assets and placing the remainder in runoff.

Greg Case, president and chief executive officer of the Chicago-based firm, made the announcement during the company’s analyst’s conference call to discuss second-quarter results in which company earnings were flat.

He said Aon plans to relinquish all of its p-c underwriting business and concentrate on life, health and accident insurance under combined insurance.

The intention is to sell off some of its underwriting niche business, specifically construction, and put the rest in runoff, said Mr. Case. The carrier will also stop underwriting all new business on the p-c side.

In June, the company announced the sale of its Aon Warranty Group to Onex Corp. of Toronto, Canada for $710 million.

“This is the best possible course to take to get as focused on our remaining portfolio as we can,” said Mr. Case.

For the quarter, Aon’s supplemental life, health and accident business, Combined Insurance of America, contributed $499 million in revenue, up 11 percent from the same period last year, while p-c business stood at $57 million, down 7 percent for the period.

Overall, Mr. Case said the broker had a solid quarter, pointing to 5 percent organic growth in both insurance brokerage and reinsurance brokerage.

For the quarter, net income increased 1 percent, or $2 million, from $191 million to $193 million. Earnings per share were unchanged at 57 cents a share. Revenues increased 5 percent, or $117 million, from $2.15 billion to $2.27 billion.

For the six months, net income remained unchanged at $391 million, but earnings per share decreased from $1.16 to $1.13. Revenues were up 4 percent, or $169 million, from $4.33 billion to $4.5 billion.

Mr. Case touted recent publications that indicate the broker has moved ahead of its competitor Marsh, considered the number one broker, in brokerage placements and other segments of the business. Marsh is still considered number one overall.

The executive said the broker has been pushing very hard over the past year to obtain new business, but declined to speculate if the new business it has acquired was at the expense of Marsh.

“We have been pushing very hard in the market and have not been focusing on Marsh or any single competitor,” said Mr. Case.

He said Aon representatives, under a new sales strategy, have been concentrating on large accounts and have spoken to accounts “we never got in front of before” to talk about the service value the firm offers them. Aon has also consolidated its selling system to one with measurable goals that has helped it grow its business.

“We have invested a tremendous amount, and there’s a lot of effort going into how Aon approaches the market and delivers value, and how we get paid for our value,” said Mr. Case.

Despite the results, he said the company is not satisfied and will aim to make more improvements in the future.

From National Underwriter (www.nationalunderwriter.com)

Former Agent Pleads Guilty to Fraud and Grand Theft

A San Diego insurance agent/broker who failed to send clients' premium funds to insurance companies, causing the victims to lose more than $150,000, has pled guilty to one count of insurance fraud and one count of grand theft, according to the California Department of Insurance.

According to Insurance Commissioner John Garamendi, Oscar Serron, 52, a former insurance agent and broker from San Diego, entered his plea following a a probe by the CDI Investigation Division of consumer complaints received during 2003 alleging that Serron committed insurance fraud involving premium theft. Serron, who entered his plea July 31, was the owner of First Preferred Insurance Services located in Oceanside, Calif.

Documentary evidence seized from Serron's office in 2004 revealed names of clients and policies that had not been placed after premiums were paid to Serron. Several individuals who purchased auto insurance policies from Serron were involved in car accidents and, without their knowledge, were not insured at the time of the accident. One victim who had purchased homeowner's insurance suffered a major loss when her home was destroyed due to a fire.

All of the victims thought they were insured when in reality they had no coverage due to Serron's failure to forward the premium funds to the insurance companies. The documented total loss suffered by the victims is more than $150,000.

Serron was arrested in Wisconsin in November 2005. The San Diego County District Attorney's office is prosecuting the case. As part of the plea agreement, Serron agreed to have all his licenses revoked. Victim restitution is to be decided at a later date. Serron is currently at his residence in Wisconsin where he is awaiting his sentencing scheduled in San Diego on December 11.

From California Department of Insurance (www.insurance.ca.gov)

Texas Independent Agents Oppose Agency Compensation Settlements

The Independent Insurance Agents of Texas reported it has joined other agent groups in denouncing the latest attack on independent agents and agency compensation represented by the settlement between St. Paul Travelers and the attorneys general of New York, Connecticut and Illinois. Among other requirements, the settlement limits the payment of contingency income, including profit sharing, on certain lines under certain conditions.

The St. Paul Travelers settlement follows a similarly worded settlement by the three attorneys general with Zurich. The settlements were negotiated following allegations that the companies participated in bid-rigging and other anti-competitive practices with broker Marsh & McLennan Cos. The income paid by these companies to brokers included income contingent upon steering business to the company.

IIAT President-Elect Robert Hempkins said agents are frustrated by this latest settlement. "Honest agents who are following the law and producing profitable business for their companies should not be punished for the sins of the few. Yet, insurance companies continue to buckle under to the bullying tactics of a handful of ambitious politicians. It is time for agents to speak up and voice their objection to these attacks," Hempkins said in IIAT's announcement.

According to IIAT, this settlement agreement, like its predecessor with Zurich, is based on wrong assumptions and unfairly targets an innocent group of retail agents. For instance, the agreement applies to lines of insurance, such as personal lines, that have no proven connection to the kinds of misbehavior that gave rise to the allegations of wrongdoing. The settlement also does not apply to captive agents who also are compensated for both production and profitability. Perhaps the most inexplicable part of the settlement agreement is a far-reaching requirement that St. Paul Travelers support any legislation that eliminates agency contingent income.

"This settlement attacks profit-sharing agreements with no proof that such agreements actually result in anti-competitive behavior. The contingent compensation negotiated by Marsh and other large brokers bears no resemblance to the typical agent's profit-sharing compensation which is under attack today," Hempkins said.

Hempkins said the companies may be the real victims of these settlements. "Ironically, in the long run, these agreements may have the worst effect on the companies that sign them. If the settlements result in the loss of profit-sharing agreements, these companies will have lost one of the best underwriting tools available to them."

Source: Independent Insurance Agents of Texas (www.iiat.org)

From Insurance Journal (www.insurancejournal.com)

Texas Action Council on Theft Launches Anti-Theft Web Site

The Texas Action Council on Theft, a non-profit coalition of insurers and law enforcement officials, has officially launched its Web site, according to Sandra Helin, TACT Project Director. TACT is administered by Southwestern Insurance Information Service.

"We are happy to announce that TACT has it's own domain now and consumers can visit this site to learn more about or Protect Our Property and Parts labeling program. It will also provide the convenience to consumers of being able to download and print the POP order form directly from our site," Helin said.

The Web site address is www.texasactioncouncil.org.

TACT piloted the first of its kind statewide property identification program in 1993. In October of 1996, after years of research and development, TACT announced the Protect Our Property and Protect our Parts Program; a massive vehicle and personal property identification program designed to aid in the recovery of stolen automobile parts and personal items.

TACT is a non-profit coalition of insurers and law enforcement officials that strives to reduce property and auto theft in Texas. "Any company or entity that is interested in helping to reduce theft in Texas welcome to place a link on their Web site or in their publications," Helin said.

For further information on TACT and the Protect our Property program contact Sandra Helin at (800)-286-9801.

Source: Texas Action Council on Theft (www.texasactioncouncil.org)

From: Claims Guides (www.claimsguides.com)

CA Insurance Commissioner Announces Sentencing of Rosamond Couple for Workers' Comp Insurance Fraud

Insurance Commissioner John Garamendi announced today the sentencing of Robert and Rosemary Bunch, both 56, on workers’ compensation insurance fraud convictions. The Rosamond couple pled guilty prior to a jury trial.

The Bunches were sentenced on July 28 in Kern County Superior Court. Each must serve 31 days in the County Jail. Mr. Bunch was ordered to pay $58,000 and Mrs. Bunch was ordered to pay $48,000 in restitution. Both also must pay additional criminal fines of $4,000 each. Mr. Bunch worked as an electrician with National Cement Company in the city of Lebec, and his wife was a clerk at United Methodist Church in Lancaster.

“Our investigators will continue to track and pursue insurance fraud wherever we find it,” said Commissioner John Garamendi. “Workers’ comp insurance fraud hurts us all by driving up costs for honest businesses who are trying to compete fairly in a competitive market.”

The pleas and sentencing were the result of a joint one-year investigation between the California Department of Insurance’s Fraud Division and the Kern County District Attorney’s office. According to investigators, CNA Insurance – the carrier handling Mr. Bunch’s claim – reported the workers’ comp insurance fraud after receiving information that Robert was videotaped working beyond his reported limitations. The California Insurance Guarantee Association (CIGA) is handling Mrs. Bunch’s claim.

Despite the fact the Bunches reported to doctors that they were unable to return to work, CNA Insurance obtained information proving they both performed physical activities such as yard work and construction. Mr. and Mrs. Bunch had each filed workers’ comp claims with their employers with benefit payments of more than $300,000 and $800,000 respectively.

Videotape was obtained of Mr. Bunch working on top of a large metal building, lifting a ladder and doing yard work with no visible signs of injury. His wife was videotaped at her home doing yard work without the use of a cane or wheelchair; however, she was always either using a cane or in a wheelchair at workers’ comp hearings, doctor visits, or at public shopping malls.

Investigators say Rosemary was provided limousine service for two years as part of her workers’ compensation claim because she reported to her doctor that she could not drive. Limousine driver Peter Babroudi, 27, testified in his deposition regarding Rosemary’s workers’ comp claim that she was so disabled he had to assist her into the limousine. However, videotaped evidence showed Babroudi and Rosemary on different occasions carrying Rosemary’s cane to the limousine while Rosemary walked on her own without assistance.

Babroudi pled guilty in June 2006 to a misdemeanor charge of insurance fraud prior to his preliminary hearing.

From California Department of Insurance (www.insurance.ca.gov)

USAA Requests Insurance Rate Reduction

By Kelly Johnson
Sacramento Business Journal

Insurer USAA is asking state regulators for the OK to slash California homeowners insurance premiums by an average of 22 percent, or $308 a year.

The lower rates would apply to more than 182,000 USAA households in California, and could mean cuts of up to 27 percent for some policyholders. The proposed decrease would total $55 million.

USAA is the Golden State's fifth-largest homeowners insurer. Its Sacramento regional office employs about 700 people.

Insurance Commissioner John Garamendi, who must review the proposal, said in a news release Thursday that he applauded the rate filing and urged other insurers to also lower rates.

The California Department of Insurance recently found that four of the largest homeowners insurers, representing 51 percent of the California homeowners insurance market, pay less than 50 cents of each premium dollar to settle claims. Garamendi responded to those findings by ordering four large insurers -- State Farm Insurance Cos., Allstate Insurance Co., Farmers Insurance Group of Cos., and Safeco -- to prove that their current rates aren't excessive. If they can't, Garamendi said he will order them to reduce rates.

From Sacramento Business Journal (www.bizjournals.com)

Brown, Lockyer Well Ahead in Bids for CA Statewide Office

By John Marelius
Associated Press

Two prominent California Democrats - former Gov. Jerry Brown and Attorney General Bill Lockyer -hold commanding leads in their bids for statewide offices, according to a new Field Poll.

The results are less optimistic for two statewide Democratic officeholders seeking to swap jobs. Insurance Commissioner John Garamendi holds a modest although not insurmountable lead for lieutenant governor, and Lt. Gov. Cruz Bustamante appears to be in trouble in his campaign for insurance commissioner.

Two other statewide races, for secretary of state and controller, feature candidates who are little known to the vast majority of voters.

In a survey of voters considered likely to cast ballots in the Nov. 7 general election, the Field Poll found that Brown, the mayor of Oakland, leads his Republican opponent by 21 percentage points.

In the race for treasurer, Lockyer holds a lead of nearly 2 to 1. Garamendi holds a 10-point lead for lieutenant governor over state Sen. Tom McClintock, R-Thousand Oaks, who placed third in the race for governor in the 2003 recall election.

Bustamante holds a lead of only 4 percentage points for insurance commissioner against his virtually unknown Republican opponent.

Here's how each statewide race below the office of governor is shaping up:

Lieutenant governor: Garamendi leads McClintock 48 percent to 38 percent. The poll shows Garamendi is known to nearly two-thirds of the likely voters and favorably regarded by Democrats and Republicans alike.

Secretary of state: Democrat Debra Bowen, a state senator from Redondo Beach, holds a statistically insignificant lead of 38 percent to 35 percent over appointed Republican incumbent Bruce McPherson. Field Poll director Mark DiCamillo said McPherson could benefit by a solid re-election victory by Republican Gov. Arnold Schwarzenegger.

Controller: In a race between little-known contenders, Democrat John Chiang, a member of the Board of Equalization, leads Republican Tony Strickland, a former state Assembly member from Westlake Village, 38 percent to 27 percent.

Treasurer: Lockyer holds a decisive lead over Republican Claude Parrish, a member of the Board of Equalization, 52 percent to 27 percent.

Attorney general: Brown leads Republican Chuck Poochigian, a state senator from Fresno, 54 percent to 33 percent. "I think this will be a yes-or-no vote on Jerry Brown," DiCamillo said.

Insurance commissioner: Bustamante leads Republican businessman Steve Poizner 43 percent to 39 percent, even though the poll shows that only 15 percent of the likely voters know enough about Poizner to have an opinion about him. The poll also shows voters having a negative opinion about Bustamante - presumably stemming from his lackluster campaign for governor in the 2003 recall.

"You look at the negatives on the image and you look at the closeness of the preference measure when you're comparing somebody who's well-known against somebody who's not known at all, you'd have to say Bustamante's vulnerable," DiCamillo said.

The poll was conducted July 10-23 among 762 likely registered California voters, split into two equal-sized groups, and has a margin of error of 5.2 percentage points.

From Associated Press (www.ap.org)

Allstate Promises No Louisiana Exit

By Daniel Hays
National Underwriter

Louisiana’s top insurance regulator said after meeting with Allstate’s top management yesterday at the insurer’s Northbrook, Ill. headquarters that he was reassured the carrier would not be leaving Louisiana’s homeowners market.

Insurance Commissioner Jim Donelon last week, before securing a meeting with Allstate President Thomas J. Wilson, had raised the possibility of legal action against the company if it sought to drop its existing business in the state.

Allstate has said it is considering dropping wind and hail coverage for about 30,000 policies, which the commissioner said are located in 18 parishes in the state.

Mr. Donelon said the state’s consumer protection statutes prohibit any move by an insurer to unilaterally change or cancel a policy that has been in effect for more than three years. The law, unique to Louisiana, has been on the books since 1992, he said.

After his confab with executives, he reported he had reemphasized this point.

The commissioner originally asked for a meeting with Allstate Chief Executive Officer Edward M. Liddy, saying he hoped a session with top management would be more productive than his talks with others at the company.

His three-and-a-half hour session with Mr. Wilson yesterday included Gov. Kathleen Blanco, who took part via speakerphone.

Mr. Donelon said in a statement that he was pleased he had the conference with top Allstate officials, “so I could hear from the horse’s mouth where they stand.”

“We will use this as a basis to go forward in our work and decisions to solve the problem that we face, which is to ensure that our people across the state have coverage at an affordable price. It’s going to take a great deal of work, and all the resources that we can bring to bear to solve this problem,” Mr. Donelon continued.

“I look forward to working with the industry, the legislature, the governor and business leaders around the state to help us reach our goal,” Mr. Donelon added.

“However we proceed, we have to keep in mind the obligations imposed by our consumer protection laws. I made our position clear to Allstate that we will vigorously resist any effort to cancel the wind and hail portions of homeowner’s policies in violation of state law,” his announcement concluded.

From National Underwriter (www.nationalunderwriter.com)

Insurance Commissioner John Garamendi Announces Arrest of San Jose Resident for Auto Insurance Fraud

California Insurance Commissioner John Garamendi on Wednesday announced the arrest of a San Jose woman for insurance fraud after she allegedly falsified information while submitting a claim to an insurance company.

Suzanne Aguilar, 34, of San Jose, was arrested July 13 at her home for automobile insurance fraud. According to investigators from the California Department of Insurance’s Fraud Division, on July 25, 2005, Aguilar was involved in a car accident causing a total loss to her vehicle and damages to the vehicle she rear-ended. Her insurance policy through Infinity Insurance Company had been cancelled on June 18, 2005 for non-payment.

However, on July 30, 2005, she renewed her auto insurance policy after making payment. Then she allegedly filed an insurance claim on August 2, 2005 for the auto collision that occurred on July 25, 2005, stating that it took place the day of her claim.

Aguilar was charged with one felony count of filing a fraudulent insurance claim. She was booked into the Santa Clara County Jail with bail set at $25,000. The Santa Clara County District Attorney’s office is prosecuting the case.

From California Department of Insurance (www.insurance.ca.gov)

Insurer Travelers Agrees to $77M Settlement

St. Paul Travelers is the latest insurance company to strike a deal settling price-fixing allegations.

Travelers agreed to pay a total of $77 million. Of that sum, $37 million would be allocated to a fund for certain policyholders; the remainder would be paid as a fine. Terms of the settlement -- reached with Attorneys General in Connecticut, Illinois, and New York, as well as the New York State Department of Insurance -- excluded admission of wrongdoing.

A number of insurers have been the target of probes into their broker-commission policies. Regulators have alleged that insurance companies increased commissions to brokers who sent more business their way, shifting broker loyalties to particular insurers rather than their clients.

Insurance broker Marsh & McLennan agreed to pay $850 million last year to settle price-fixing claims.

From Bank Net 360 (www.banknet360.com)

American Family Insurance Agent Brovold Earns Customer Satisfaction Excellence

Ben Brovold, an American Family Insurance agent in Walker, has been recognized for customer satisfaction excellence under the J.D. Power and Associates Distinguished Insurance Agency Program.

Brovold joins other American Family agents who have demonstrated the highest level of commitment to outstanding customer service. The service excellence distinction was determined through a two-part evaluation process conducted by J.D. Power and Associates. The first part consists of a customer satisfaction survey that measures customers' overall experience with their current American Family agent.

In order to proceed to the second step, agents must meet or exceed the standards measured on a national benchmark established by J.D. Power and Associates' annual auto and home insurance customer satisfaction studies. Only agencies that perform in the top 20 percent of all agencies nationwide based on customer satisfaction surveys are eligible to become a Distinguished Insurance Agency.

Agents who meet or surpass the overall national average must then pass a rigorous on-site evaluation based on five best practice areas: proactive reviews of customer insurance needs, claims handling, positive customer contacts, responsiveness and office environment.

"The Distinguished Insurance Agency award helps our agents to identify the areas of customer service that are most valued by their customers," said Jack Salzwedel, American Family president-elect. "I am extremely pleased by the enthusiasm shown by our agents. The Distinguished Insurance Agency award reflects their commitment to providing the best value to our customers."

Brovold has been an agent for American Family since July, 2001. His office is located at 111 6th Street South and will move to Northernaire Plaza at the end of August.

American Family Insurance, based in Madison,Wis., offers auto, homeowners, life, health, commercial and farm-ranch insurance, plus consumer loans and annuities in 18 states. American Family is the nation's third-largest mutual property-casualty insurance company and 14th largest property and casualty insurance group in the United States.

From the Walker (MN) Pilot-Independent (www.walkermn.com)

136-Year-Old Insurance Agency Displays Historical Items

It is rare to find a present-day company that was founded just one year after the town in which it is located was established. It is an even greater rarity to find a company whose history is as intertwined in the community as the Charles F. Hartshorne & Son, Inc. Insurance Agency of Wakefield.

Hartshorne & Son was founded in 1870 by then-Town Clerk Charles F. Hartshorne, and was the first insurance agency to operate in Wakefield. In its early years, the agency specialized in fire insurance and worked with two insurance companies, one of which was the Franklin Fire Insurance Company, founded by Benjamin Franklin. Early records indicate that the first earthquake coverage policy in New England was written by the agency, for the Wakefield Trust Company.

When Charles' son Frederic S. Hartshorne (who also served as town clerk) joined the agency in 1892, coverage lines increased along with the number of policyholders and the states in which the agency did business.

Today, agency President Charles F. Hartshorne says the trend continues, with more than 3,000 active accounts - representing more than 10,000 insured customers - and seven active carriers represented by the company. Coverage lines have also evolved over the past 136 years to include automobile, homeowners, apartment and life insurance, as well as a complete line of commercial line coverage.

Although the Chas. F. Hartshorne & Son Insurance Agency has grown to meet the needs of its customers, the company's focus also remains on its roots. The 3 Chestnut St. office reflects this focus with a display featuring a collection of artifacts from the company's first years. The collection, amassed by Hartshorne's grandfather, Frederic Manning Hartshorne, and his father, Joseph Hartshorne, includes buckets from the original fire brigades and a fire mark used by an insurance company to identify property it insured.

"According to legend, a fire mark on a building meant that a reward would be paid to the first volunteer fire brigade that put out the fire, and that if there was no fire mark, the fire brigade would not fight the fire," Hartshorne said. "In reality, the fire mark was used by the insurance companies as an advertisement and as a way to let the company know that they were the insurer in the event that the paperwork was destroyed in the fire."

Hartshorne said the collection on display is a great reminder, to the staff and customers, that Chas. F. Hartshorne & Son is a part of the community.

"Our predecessors who came before us have inspired us to serve our customers and our community," he said.

The current president, the great-great grandson of the company's founder, follows a long line of Hartshornes who have been at the helm of the company. It was after the founder's death and after his son Frederic left his position as town clerk that the agency moved from its town hall office to Chestnut Street in 1939. Frederic's grandson and Hartshorne's father, Joseph, was president from 1952 until his death in 1958. His brother Jean became president in 1958 followed by Joseph's widow, Marion Hartshorne Orne, who assumed presidency of the agency upon Jean's death in 1995. Her son, Charles F. Hartshorne and her son-in-law, John Spinello, now operate the business.

"The agency is not only a hometown business, we are also a leader among the independent insurance agents in New England," Hartshorne said. "We are fortunate that we know our customers and their needs, and we have the ability to meet those needs through our affiliation with some of the finest carriers in the nation."

The Chas F. Hartshorne & Son, Inc. Insurance Agency actively represents seven carriers and has affiliations with several more for customers with unique insurance needs. Active carriers include Travelers, Commerce, Premier, National Grange, Mutual, Merrimack Mutual, Vermont Mutual and CAN Surety.

For information about the Chas F. Hartshorne & Son, Inc. Insurance Agency, call 781-245-4343, or visit their Web site at www.hartshorneins.com.

From Wakefield Observer (www.townonline.com)

Insurance Salesman Arrested for Loan Scam

By Wil Cruz
Newsday

Nassau detectives have arrested a Levittown man after he allegedly forged three victims' names and trying to cash checks worth $160,000.

Crime Against Property Squad detectives nabbed Scott Froehlich, 27, of 47 Pelican Rd., yesterday afternoon at the State Farm Insurance at 158A Manetto Hill Rd. in Plainview, where police said he worked in insurance sales.

Froehlich is accused of making loan payments to himself. He allegedly used three customers' information for his scam, police said.

After signing the victims' names onto the checks and depositing them into his account at Commerce Bank, police said he cashed two of the checks worth $115,000. But a State Farm investigator put a so-called stop payment on another check for $45,000, detectives said.

Russell Ruestman, the investigator, then contacted Nassau authorities.

Froehlich was charged with second-degree and third-degree grand larceny, three counts of second-degree forgery, and first-degree identity theft, all felonies, police said. His arraignment is scheduled for today at First District Court in Hempstead.

A man who answered the telephone at the Froehlich home declined comment.

From Newsday (www.newsday.com)

W.R. Berkley Buys SF Captive Insurance Specialist

W.R. Berkley Corp., a large insurance holding company and commercial lines insurer based in Connecticut, has acquired Garnet Captive Services LLC, a San Francisco insurance brokerage and alternative risk consulting firm.

Terms of the deal weren't disclosed.

Greenwich, Conn.-based W.R. Berkley (NYSE: BER) said Garnet Captive will be managed by its Berkley Risk Administrators Co. LLC, noting that Garnet provides various risk consulting and brokerage services, including captive insurance program services, primarily for workers' compensation insurance customers.

The deal "offers an opportunity for Garnet Captive to increase the scale of its business and for BRAC to enter into a new area of the alternative markets business," officials said Aug. 1.

BRAC operates as a third party administrator of property/casualty insurance claims, policy and underwriting services to insurers, businesses, governments, educational institutions, tribal nations and non-profit entities, officials said in a statement.

W.R. Berkley specializes in five segments of the property/casualty insurance business, they said: Specialty insurance, regional property/casualty insurance, alternative markets, reinsurance and international insurance. It had 2005 revenue of just under $5 billion.

From San Francisco Business Times (www.bizjournals.com)

Broker Security Breach Puts N.Y. Workers' Comp Clients at ID Risk

By Michael Gormley
Associated Press

The names, addresses and Social Security numbers of as many as 540,000 injured workers have been lost, and the state and a contracted company are trying to protect the workers from identity theft.

In New York, company and state officials said that the data was on computer hardware that is missing from a secured facility of the company, Chicago-based CS Stars, an independent insurance brokerage.

Most of the workers are New Yorkers from across the state who are in two special funds of the workers' compensation system. One group is all workers who have a second injury and another is all workers who have a past injury that creates new problems, said state Workers Compensation Board spokesman John Sullivan.

The state-owned personal computer provided to CS Stars, "cannot be located,'' according to a letter the company sent to the people whose information was lost.

CS Stars had been using the computer to move the data from the state to the company's computerized claim system, according to the letter.

The FBI is investigating, said Mike Kachel, spokesman for CS Stars' New York City office. He declined to release details that he said could hamper the investigation, including when the computer went missing.

"At this time, we have no indication that any of the data stored on the missing hardware has been used inappropriately,'' Kachel said. "That doesn't lessen our desire to do what is right.''

The company is offering the people identity theft insurance, 12 months to get free credit reports and access to fraud resolution specialists.

It was the latest report in a rash of government data on individuals being compromised, from a stolen Veterans Affairs laptop containing information on 26.5 million veterans to a hacker in the Nebraska child-support computer system who may have gotten data on 300,000 people and 9,000 employers.

Source: Associated Press (www.ap.org)

From Insurance Journal (www.insurancejournal.com)

Mercury Insurance Launches New Advertising Campaign

Los Angeles-based Mercury Insurance Group has launched "Mercury Theory," a humorous new advertising campaign featuring a suite of 10, thirty-second TV commercials, as well as an interactive destination website, www.mercurytheory.com.

The commercials began airing this week on network affiliates and cable TV in major markets in Arizona, California, Florida, New Jersey, Oklahoma, Texas and Georgia (beginning July 31), as well as Philadelphia.

"Mercury Theory" presents an upgraded marketing direction, the company said. "A dry list of facts may have sold auto insurance in the past, but not anymore. Today, audiences want to be entertained by advertising," said Erik Thompson, director of advertising. "This campaign gives us the ability to communicate Mercury's core values -- low rates, great service and financial stability -- in such a way that will leave a lasting impression upon consumers while we entertain them."

The focus of the campaign is to humorously communicate Mercury's core strength of low auto insurance rates.

"The insurance space has become very competitive over the past two years," says Chuck Wall, CEO of MarketPower Group, Mercury's advertising agency of record.

The new website, www.mercurytheory.com, offers many of the TV commercials before they air.

Mercury auto insurance is sold in 13 states: Arizona, California, Florida, Georgia, Illinois, Michigan, Nevada, New Jersey, New York, Oklahoma, Pennsylvania, Texas, and Virginia. Mercury also offers homeowners, personal liability and mechanical-breakdown insurance in several of these states. For more information visit http://www.mercuryinsurance.com/.

Source: Mercury General Corporation (www.mercury.com)

From Claims Guides (www.claimsguides.com)

Universal Health Care Answers California's Needs

By Willie L. Pelote, Sr.
American Federation of State, County and Municipal Employees

California needs to wake up and realize that universal health care is not a liberal pipe dream; it is the only way to fix our broken system of skyrocketing health care costs, inadequate care and millions of uninsured individuals.

The purchase of health care does not fit into standard economic models that explain costs by supply and demand. People do not demand health care; they are forced into receiving it because they get sick. No matter who is paying for it, be it HMOs, private companies, small businesses or the government, the money has to come from somewhere. The only way to reduce these costs is to rearrange the system so that all of the money comes in and out through one central location, where it can be effectively managed.

Senate Bill 840 by Sen. Sheila Kuehl, D-Los Angeles, will create the California Health Insurance Agency. All health care dollars will be pooled into a single trust fund through a single-payer health system. Twenty billion dollars will be saved in the first year by streamlining administrative costs. Medical supplies and prescription drugs would be purchased in bulk, cutting these costs by 50 percent and saving billions more.

Preventive care, early diagnosis and timely treatment of ailments in a doctor’s office rather than emergency rooms will save money, reduce suffering and eliminate premature deaths, as a lack of medical insurance is the seventh leading cause of death in the United States.

As SB 840 will soon be heard on the Assembly and Senate floors, liberals and conservatives alike should call their elected representatives and urge them to pass this important legislation. Likewise, all Californians should urge Gov. Arnold Schwarzenegger to reconsider his unfounded criticisms of universal health care and live up to his promise to be an unconventional leader who is willing to consider new and bold solutions to our most daunting problems.

California can lead the nation toward a new understanding of fiscally responsible health care, but must first understand the issue, face the facts and dispel our prejudices against universal health care.

From Inside Bay Area (www.insidebayarea.com)

In Florida, a New Convergence of Real Estate and Insurance

By Stephen Frater
Florida Herald-Tribune

For Coldwell Banker Residential Real Estate Inc., insurance might be a
new edge to help it move houses.

On Tuesday, the state's largest real estate broker will start offering
its customers a broad palette of insurance, everything from homeowner's
to automobile, through NRT Insurance Agency Inc., part of Coldwell
Banker's parent company.

This large-scale convergence of real estate and insurance is not open
to everyone seeking to avoid huge rates, such as those offered by
Citizens Property Insurance, the state-run insurer of last resort.

Only Coldwell's customers can tap it, and only NRT-owned brokerages
will participate. Franchised Coldwell Banker offices are not in the
program.

"We're not trying to insure the world," said Budge Huskey, president of
Coldwell/NRT in Florida, which is based in Sarasota.

Besides attracting more real estate business, another of Coldwell
Banker's goals is to simply close deals, Huskey said. More and more these
days, deals are being snarled by insurance issues.

The program could have a strong impact in Florida, where many
hurricane-battered property insurers are raising premiums, cutting back on
coverage or bailing out altogether.

Coldwell and NRT also are examining the idea of extending insurance
services to developers and commercial clients, where the lack of coverage
is regularly holding up or quashing deals.

Policies will be offered by companies such as Chubb, American Strategic
Insurance, ASI-Lloyds of London, Fireman's Fund, Travelers, Encompass,
The Hartford and Liberty Mutual.

NRT Insurance spokesman Joe Gibbons suggested that the companies could
provide savings over comparable products because of NRT's size and
economies of scale.

The company's move was news to Greg Bustle, president of the
98-year-old Bradenton-based insurance agency Wyman, Green and Blalock.

But Bustle, whose company also plays in the real estate game, noted
that it is a natural progression: Banks have been playing in insurance in
recent years, so why not real estate agents?

"It's diversification and a logical place for them to go," Bustle said.

Scott Johnson, executive vice president of the Florida Association of
Insurance Agents, agreed. "The two businesses, real estate and
insurance, are compatible with each other. It's an affinity relationship."

As another example, Johnson pointed to Frank Kowalski Sr., immediate
past president of the Florida Association of Realtors who also is head of
his own insurance agency.

Waltham, Mass.-based NRT Insurance, formerly called Coldwell Banker
Residential Insurance Agency, is licensed in all states, and its program
is active in 45. Its insurance program started five years ago in the
Northeast and moved to California this year.

The insurance products are geared primarily to buyers and include
homeowner, renter, auto, boat and recreational vehicle coverage.

The sale of the policies will not financially benefit the real estate
associate who brings the client in the door, Huskey said.

Coldwell Banker Residential Real Estate Inc., with 168 offices in
Florida, handled about 70,000 transaction sides in the state last year, or
more than $23 billion in volume.

The insurance program will begin much more modestly, with six workers
in the Tampa-St. Petersburg market and telephone support from NRT
Insurance outside of the Sunshine State.

But Huskey expects that Coldwell's 7,200 sales associates will likely
provide a tremendous feeder system for insurance sales.

From Florida Herald-Tribune (www.heraldtribune.com)

American Family Insurance Agents Recognized for Customer Service Excellence

More than 1,350 licensed American Family Insurance agents from throughout the company's 18 operating states have been recognized for customer service excellence under the J.D. Power and Associates Distinguished Insurance Agency Program(SM). This distinction acknowledges a strong commitment by American Family agents to provide their customers outstanding service.

The service excellence distinction for each agent was determined through a two-part evaluation process, consisting of a customer satisfaction survey and an extensive on-site agency audit. First, agents must receive customer satisfaction survey scores in the top 20 percent of all agencies nationwide, as established by the J.D. Power and Associates annual auto and home insurance satisfaction studies, based on customer experiences with their current American Family agent. Those top agents must then pass a rigorous on-site evaluation based on five best practice areas: personal insurance reviews; claims handling; positive customer contact; responsiveness; and office environment.

Agents that meet the qualification standards based on these criteria are eligible to be recognized as a Distinguished Insurance Agency under the J.D. Power and Associates program.

"Our research shows that the agent has an enormous impact on the customer's overall satisfaction with the insurance provider," said Kevin Keegan, executive director of the insurance practice at J.D. Power and Associates. "To be acknowledged among this elite class of agents is evidence of a true commitment to meeting the needs of customers both for American Family and the agents that qualify."

"This is our second year in the program, and the early returns have been very encouraging," said Jack Salzwedel, American Family executive vice president. "Our customers have responded positively to the Distinguished Insurance Agency designation, and this year more than 30 percent of our agents met the industry-wide standards required to receive the award. As a result, more than 550 additional agents received the designation this year. At the core of the program, we're providing information that helps our agents focus their attention on the services their customers value most. And, in an industry as competitive as ours, value is the name of the game."

Source: J.D. Power & Associates (www.jdpower.com)

From PR Newswire (www.prnewswire.com)