SignOnSanDiego.com » News » Business » Dean Calbreath -- Examining 'emergency' insurance regulations
That's what insurers said would happen if California's Proposition 103 passed in November 1988. Advertisements said the referendum would put "big government into the car insurance business." The head of the California Chamber of Commerce warned that "massive government intervention" would push insurance rates through the roof. Twenty years later, those stern warnings seem - how can I put this? Alarmist? Foolish? Mistaken?
Since Proposition 103 passed - requiring that insurers get approval from the Department of Insurance before raising their rates - California has had the lowest rise in auto insurance rates in the nation, according to a study by the Consumer Federation of America. Nationwide, auto rates rose an average of 50 percent between 1989 and 2005, the most recent year for which comprehensive data are available. In comparison, California rates rose less than 13 percent.
California has dropped from having the nation's fourth-highest auto insurance rates to the 16th-highest. Thanks to Proposition 103, California drivers have saved an estimated $61.8 billion since 1989, averaging $2,660 per driver, according to the CFA study. The study suggests the savings would have been greater if not for a string of lawsuits and other hurdles that slowed the law from being fully enacted.
The proposition did not prevent insurers from reaping healthy profits. The 10.1 percent profit margin in California is well above the 8.1 percent national average, according to the CFA report. So everybody's happy, right? Wrong. Proposition 103 remains a battleground among insurers, regulators and consumer advocates. The latest skirmish started two weeks ago when Insurance Commissioner Steve Poizner introduced "emergency" amendments revising regulations written by his predecessor, Lt.
Gov. John Garamendi. Poizner, a moderate Republican and former Silicon Valley business executive, has always been a bit friendlier with insurers than Garamendi, a longtime Democratic politician from the Central Valley. Insurance companies will get a fair shake with my office," Poizner said when he was elected, though he also pledged to be "fiercely independent of the insurance industry."
When he took office in January 2007, Poizner was confronted with 16 sets of regulations that Garamendi drafted in his last weeks of office, mostly as mechanisms for enforcing Proposition 103. To Garamendi, these regulations provided important consumer protections. To Poizner, they were a mess. Like so many of these last-minute efforts, (these) regulations were not fully baked," Poizner wrote Garamendi last week.
It is clear that your rush to submit them was more about legacy building and partisan politics than good public policy." Other than his complaint that the regulations were poorly written, Poizner's chief gripe seems to be that they did not treat the insurance companies well enough.
It is essential that we foster an environment in which insurers want to compete and expand," he wrote Garamendi. If such an environment does not exist, consumers will be hurt in the form of reduced choices and higher prices. The regulation you left me was flawed because it ignored this fundamental principle."
Given the relatively decent profit margin and high level of competition in the California market - we rank fourth-highest for competitiveness throughout the nation, according to the CFA study - there's a case to be made that insurers already can compete and expand here. The amendments Poizner enacted last week go even further. For one thing, they give him the ability to let insurers boost their profit margin by as much as 2 percent above the current rate.
In addition, Poizner will let insurers suggest their own base periods to show business trends, which is a key tool for setting rates. In contrast, Garamendi used a standardized base period for fear that insurers could game the system to charge higher rates.
I am more than disappointed; I am alarmed," Garamendi wrote Poizner on Thursday after hearing about the changes. These recent changes represent an attempt to undermine (Proposition 103) in a significant way." Consumer advocate Harvey Rosenfield, who authored Proposition 103, accused Poizner of engineering "an outrageous giveaway" to insurers.
Garamendi and Rosenfield, who heads Consumer Watchdog in Santa Monica (formerly known as the Foundation for Taxpayer and Consumer Rights), are equally troubled by the way in which Poizner enacted the changes: as emergency regulations, drafted with little opportunity for public comment.
Before Poizner enacted the changes, he held one public meeting - a workshop on April 7 in Sacramento attended by several dozen insurance executives, lawyers and lobbyists and an attorney from Rosenfield's consumer group. Several of Poizner's more controversial amendments were not aired at the workshop, Rosenfield said. Instead, they were written after he received letters from insurers such as State Farm, 21st Century and the California State Automobile Association.
State Farm was particularly helpful, providing a copy of existing insurance regulations marked up with the changes the company wanted to see enacted.
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The Canadian Press: Consumer groups call for changes to provincial insurance regulations
The regulations, which were changed in October 2003, increased the deductible for compensation awards from $15,000 to $30,000 and placed an increased burden of responsibility on victims to prove real harm after an accident. In 2003, insurance companies registered a profit of $2.5 billion, rising to $4.7 billion in 2007, Halpern said.
It's bad for Ontarians and it's bad for business," he said at the outset of a two-day auto insurance summit where consumer advocates squared off against industry representatives. Halpern also fired a salvo at George Cooke, CEO of Dominion Insurance Company of Canada, who was sitting at a table only metres from the podium. Let's look at Mr. Cooke's company," said Halpern, noting that Dominion increased dividends paid to its parent company from $40 million to $60 million last year despite a drop in net operating income.
Congratulations, Mr. Cooke: auto insurance is a good business." Halpern said insurance companies operate outside regular market forces and have successfully lobbied the government for regulatory changes rather than adopting fiscally responsible business practices. His comments came after Cooke delivered a speech attacking the adversarial stance that lawyers take when dealing with insurance companies.
Referring to an article on the Ontario Bar Association's website criticizing insurance companies for earning more by offering less, Cooke said that "kind of practice destroys credibility very quickly." Surely consumers deserve a thoughtful and accurate representation of facts, and not dramatic misrepresentation." Cooke also called into question the legal profession's practice of taking between 30 to 50 per cent of injury settlements for themselves.
Former associate chief justice Coulter Osborne, who was hired by Ontario's Liberal government in 2006 to improve access to civil courts, likened the $30,000 deductible to a "tax on pain." Osborne said the 2003 regulatory changes have become "direct barriers to justice" and need to be taken under "serious consideration."
The Ontario legislature plans to reopen the debate over the regulations this fall. Adrienne Seggie, whose son was killed by an alleged street racer 18 months ago, said the $30,000 deductible for pain, suffering and personal injury adds "insult to injury." Seggie said each of her four remaining kids can claim about $30,000 in damages for their brother's death, but each settlement is subject to a separate $15,000 deductible.
Marie Smith, president of the United Senior Citizens of Ontario, said current provincial regulations are unacceptable and discriminate against seniors. I feel this is just another form of elder abuse," she said, adding that seniors can't sue for lost income after an accident.
She said the $30,000 deductible prevents grandparents from obtaining any compensation for the death of a grandchild. If I was suing for a grandchild, I can only get $15,000 and they take $30,000, so I get nothing," she said. Hosted by Copyright © 2008 The Canadian Press.
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BBC NEWS Business RBS 'plans to sell insurance arm'
The businesses could raise up to 5bn for RBS, the Sunday Telegraph said. The report comes as RBS executives meet to discuss plans to ask shareholders for up to 12bn of extra cash. The board is set to unveil the plan to raise money from existing investors on Tuesday. It will be the biggest rights issue in UK corporate history. RBS, wants to shore up its financial position amid the global credit crunch, declined to comment on the report that it was to sell its insurance arm.
However chief executive Sir Fred Goodwin is understood to be keen to keep the businesses. Prudent measure' Insurance giants AIG, Allianz, Axa and Generali have made "preliminary enquiries" about snapping up RBS's insurance business, the Sunday Telegraph said. WHAT IS A RIGHTS ISSUE? Should RBS ask for more cash?
The rights issue is thought to be a prudent measure to provide a capital cushion for the amount of risk on its balance sheet after RBS played a leading role in last year's takeover of the Dutch bank ABN Amro. The Sunday Telegraph said that Sir Fred held secret talks with the Financial Services Authority about the prospect of a rights issue.
Reports suggest other banks - including Barclays and HBOS - have talked with the City watchdog about similar plans. The paper added that the chiefs of other banks had also met with the head of the FSA, Hector Sants, over the possibility of going to their shareholders for cash.
Both Barclays and HBOS declined to comment on the report. However there has been no suggestion that the FSA has tried to force any bank into going to its shareholders to raise cash. Chancellor Alistair Darling has also said that more banks are likely to unveil plans to boost their capitalisation.
RBS, owner of NatWest, Ulster Bank and insurer Direct Line, has not yet commented on its plans to begin a rights issue. It will issue a trading update on Tuesday, ahead of its annual meeting on Wednesday. The statement is expected to reveal write-downs of about 5bn as a result of the bank's exposure to the credit markets.
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Subprime disaster hits insurance chiefs' pockets smh.com.au
American International Group cut last year's cash bonus of its chief executive, Martin Sullivan, by 42 per cent as the world's largest insurer reported its biggest quarterly loss in 89 years. Ambac Financial Group denied Robert Genader any bonus, slashed his cash compensation by 71 per cent and then replaced him as chief executive in January. The reduction was the most of any insurer in the Standard & Poor's 500 Insurance Index.
Boards are holding chief executives accountable for $US38 billion ($40.9 billion) of subprime losses by slicing their salaries and bonuses by an average 20 per cent, regulatory filings from companies in the S&P insurance index show. That compares with an average 8.2 per cent increase for chief executives in 2005, when directors excused them for $US41.1 billion of costs from Hurricane Katrina, the most expensive disaster in American history.
Fewer and fewer companies are willing to pay bonuses in a bad year," said Richard Furniss, an executive compensation consultant at Towers Perrin who tracks insurance companies. There's too much liability, too many red faces, and too much bad publicity for the directors if they do that."
Twelve of 20 insurers in the S&P index that have reported chief executive compensation so far paid their chiefs less in salary and bonuses last year, regulatory filings show. The pay reductions cover a year when the S&P insurance index fell 7.7 per cent, including AIG's 19 per cent decline in New York Stock Exchange composite trading, Genworth Financial's 26 per cent drop, and Ambac's 71 per cent plunge.
Insurance chiefs may not get pay rises this year either, based on the International Monetary Fund's estimate that industry losses tied to mortgage markets may reach $US130 billion. Most of the writedowns stem from subprime loans to people with poor credit histories. Management should be paid on how well they pull that off."
AIG, which led insurers with $US18 billion of subprime markdowns, singled out those losses in cutting the pay of Sullivan and his deputies, including the chief financial officer, Steven Bensinger, and "senior executives with direct responsibility for financial services and asset management operations", the company's filing shows.
Genworth, the insurer spun off by General Electric, cut the annual cash incentive of its chief executive, Michael Fraizer, to $US1.4million last year from $US3 million in 2006 after the company's profit fell 8.1 per cent on losses in its US mortgage insurance business and mortgage-related bonds.
Mr Fraizer has been Genworth's chief executive since the company began trading publicly in 2004. Share and option awards are excluded from the calculations, since annual figures for equity compensation reported to the US Securities and Exchange Commission can include grants from earlier years.
Executives can decide when to cash in such awards after they've vested. Commission reporting requirements on share awards make determining boards' intentions difficult, while the annual cash bonus "is most reflective of annual performance", said Towers Perrin's Mr Furniss. Motoring: Subaru halts turbo sales A strange engine noise has left about $50 million worth of high-performance cars stalled.
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BoM scouting for partner in general insurance JV- Banking-Banking Finance -News By Industry-News-The Economic Times
We are in discussions with other potential partners that include foreign players as well.. However, we have not finalised any of them (partners) yet," BoM's Chairman and Managing Director M D Mallya said. BoM already has agreements with the Life Insurance Corp and United India Insurance for the distribution of insurance products.
Besides, it has also entered into a tie-up with Export Credit Guarantee Corp to distribute latter's export credit insurance products. Mallya said the bank decided to opt out of the insurance JV after it failed to reach certain agreements. There were no formal agreements signed so far..
We were discussing this option (to exit) and now decided to opt out as we could not agree certain terms," Mallya said. BoM had announced its intention to form a JV with the two firms last year and said it would hold per cent stake in the JV while Chennai-based firm, Shriram would hold a majority stake of 9 per cent and Sanlam of South Africa per cent.
A host of public-sector lenders such as Bank of India and Syndicate Bank are also on the lookout for 'suitable' partners to foray into Mutual Funds and Insurance business and is expected to come up with announcements this year.
Mallya also said the bank has targeted a total business of Rs 90,000 crore by fiscal from the current Rs 7, 00 crore as on March, 008. The bank achieved a growth of per cent in last fiscal with the total business growing to Rs 7, 00 crore from Rs 7, 00 crore a year-ago. This momentum is expected to be maintained in current fiscal as well," he said.
BoM has a total deposit-base of Rs, 000 crore as on March, while advances stood at Rs 9, 00 crore. The bank also plans to add about 0 branches this year to its current network of, 7 branches which would further strength its distribution network, Mallya said. We have branch licences, which would be utilised by September this year.
Opening of another 7 branches are also on cards in this fiscal," Mallya said The bank has identified retail business and enhancing the fee-based income as the key-focus areas in this fiscal, Mallya said, adding, "an equal importance would be given to the customer acquisition process as well."
Fee-based income contributed about per cent to the bank's total revenue in last fiscal while Current and Savings Accounts contributed about. 7 per cent, Mallya said. BoM, presently, has a customer-base of. Mallya said.
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Punjab to introduce health insurance scheme- Insurance news-Insurance-Personal Finance-The Economic Times
This was disclosed by Ramesh Inder Singh Chief Secretary Punjab, while addressing the concluding function of three day North Zone Inter Medical and Dental Colleges Tournament at Dyanand Medical College and Hospital last night.
Further elaborating, the Chief Secretary said that apart from BPL families, the insurance would also be extended to the small farmers and farm laborers through village level Agri Cooperative Societies. He said that the fast advancement in science and technology and medical sector had completely changed the working system in all the fields and the new technologies has become essential ingredient in the hands of professionals.
He said that in the present times, the traditional medical research was on the process of shifting from Universalities to the Pharmaceutical companies and diagnostic centers and many new inventions in medical field were coming up daily. ET Debates Is the sixth pay panel award justified? All rights reserved. For reprint rights: Times Syndication Service This site is best viewed with Internet Explorer.
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BusinessDay... the voice of business - Consolidated Hallmark leads consortium on BRT insurance scheme
The scheme provides comprehensive insurance cover for over 100 buses and tri-cycles on the scheme to the tune of 100 percent. Year 2007 award winner conferred by Ota-Agbara Chamber of Commerce, Industries, Mines and Agriculture, as the insurance company of the year, was recently listed on the Nigerian Stock Exchange with stock prices presently witnessing a rally on the floor. These are attributes that have continually endeared the new generation company to clients, potential clients and stakeholders alike, the company said.
With a robust balance sheet from the 2007 trading results, shareholders of the company, who have since foreseen a very bright future for the stock in terms of capital appreciation, continue to hold on to their holdings, resulting in scarcity on the floor of the Stock Exchange. Its premium income grew substantially by 185 percent from N508 million in December 2006 to N1.446 billion in December 2007.
The profit after tax of Consolidated Hallmark grew from N57 million in 2006 to N259 million in 2007, representing a growth of about 354 percent. Meanwhile, the company has entered into a strategic alliance with Fidelity Bank Plc to market its automobile insurance products on the Autoreg platform.
Having repackaged its existing products and came out with new ones in the last 10 months to meet the needs of the insuring public, the company will be launching three products soon. The products are Commuters Personal Accident Insurance, Enhanced Motor Policies and Building Insurance Policies. Looking ahead, the company is also planning to grow its core business through product innovation, strategic alliances for marketing as well as strategic investments that would directly impact on its premium income.
Recently, it’s Information and Communications technology was upgraded via the adoption of a new web-based on-line insurance business application package. Operations of the company in the Lagos offices have since been linked online, real time. Operations in Regional Offices of Abuja and Port Harcourt are to be linked very shortly.
Within the first year of consolidation, a strategic branch expansion initiative was embarked upon.
This has led to the opening upgrading of branches in locations like Ilorin, Oshogbo, Akure, Jos, Calabar, and Maiduguri, in an effort geared towards taking insurance services closer to existing and potential clients nationwide. To further strengthen its operations in the long run, the company plans to diversify into ancillary financial services that will support its core business of insurance. Plans are also ahead to expand into other markets in the West African sub region.
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Insurance agent faces charges in tow motor lorry driver's end - Michigan News, Updates, Photos & Video Detroit, Lansing - MLive.com
Whether you needed him, he was there." Jemmy Halt, recalling Michael Johnston. Related: • Tow truck chauffeur killed on I-94 • Discover Michael Johnston's obituary By DAVE GERSHMAN and SUSAN L. The 46-year-old Ann Arbour man was killed early Sunday by an accused drunken driver as Johnston stood by the side of his tow truck, pulling a vehicle away of a ditch on the highway.
William Lyle The person who authorities claim was remain the turn is William Lyle, a longtime insurance agent whose clients included the owner of Sakstrup's Towing. Lyle was arraigned Tuesday on charges of operating while intoxicated causing cessation to emergency personel and operating while intoxicated causing death. My client feels horribly approximately this," Lyle's attorney, John Shea, said after the arraignment.
And it's conforming any other human race who's been wrapped up this - you're constantly going over. Washtenaw County Assistant Prosecutor Eric Gutenberg told a justice of the peace that Lyle's vehicle weaved wound up a wrinkle of flares and past a parked police cruiser with its lights flashing before hitting Johnston, who was killed instantly. A blue book showed Lyle's blood alcohol content was 0.13 to 0.14 percent, above Michigan's legal edge of 0.08 percent, Gutenberg said.
Lyle was ordered held on 10 percent of $500,000 bond. He could face a minimum sentence of 51 to 85 months in prison, Gutenberg said. He had conceded he should not have been driving," Gutenberg said. He knew he should not hog been."
Later, at the county jail, officers observed Lyle appearing "jovial and laughing frequently," Gutenberg said. Lyle has lived in Ann Arbor for 40 years and has never been in episode with the edict before. His son, ex-wife and gargantuan vital in the community, Shea said.
He's almost 60 elderliness old, he's lived virtually his plentiful go without getting in any trouble whatsoever," Shea told the magistrate. Provided he's guilty of these offenses, he has trumped-up a awful wrong in judgment." As he watched the arraignment on closed circuit television from the jail, Dennis Brewer, the owner of the towing company, said he felt badly for the families of both Johnston and Lyle.
Brewer has seen many accident scenes in his 45 years in the towing business. On the contrary in this one, on I-94 all over 3:20 a.m. US-23 interchange, Brewer discovered he knew both the clown and the defendant. Lyle is a longtime insurance agent for AAA Michigan and is currently Brewer's agent at the Ann Arbor branch office. On the other hand Brewer said he has conscious Lyle for 30 caducity finished his dealings with other agents in the office.
It's tragic that one dull configuration can ruin your entity and cook you go from what a piece of human beings considered a big league mortal to a goat," Brewer said. Brewer said Johnston was well-liked, evidenced by the multifarious calls to the towing company with tales of Johnston's kind personality and the family he leaves behind.
They're colossal community and I can't all the more divine what they're going through," he said. Rafael Gladding, a alter ego and advanced roommate, called Johnston as "one of the kindest, most benign common people I ever met. He always helped gone anybody he would deliberate a friend."
Johnston enjoyed working at Sakstrup's by reason of he loved to corrective people, Gladding said. He again was an adventure-seeker who turned Gladding on to skydiving. He inspired individuals to be exceeding than what they are," Gladding said.
Jimmy Halt recalled Johnston as a fourth-generation Ann Arborite and his following mate of 25 years. Johnston loved to travel and largely enjoyed a appointment to Taiwan, Halt said. He was the most considerate, acceptable chum I probably testament ever keep in my life," Halt said. If you needed him, he was there. He never made a brimming fuss about being there, nevertheless he was there."
Visitation is scheduled for 2 to 4 and 6 to 8 p.m. His funeral is deliberate for 10 a.m. Thursday at St. Thomas The Apostle Catholic Church in Ann Arbor. Journalist Dave Gershman can be reached at 734-994-6818 or dgershman annarbornews.com.
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