National Underwriter - Is it ethical for insurance professionals to be subject to performance-based incentives, and would disclosure to those who are served by the professional avoid any potential problems created by the incentives? That was the question posed in my last column on May 21. The original suggestion for this question came from an independent adjuster and expert witness who believes that such performance-based incentives are indeed unethical. He also provided a copy of a California insurance regulation that makes compensation based on any one file or group of claim files illegal. There are at least four challenges in addressing these two questions. • First is the broad-based nature of the question. It applies not only to the company employee adjuster (the subject of the original question) but also to public adjusters, plaintiff’s attorneys, agents, brokers, underwriters, premium auditors, loss control representatives
Monday, October 01, 2001
 
Insurance Journal - AMR Corp., the parent of American Airlines, said on Tuesday that insurers are canceling its coverage for claims caused by acts of war, terrorism, sabotage, hijacking and other similar events effective Sept. 26. According to a Reuters report, AMR, the parent of TWA and American Airlines and the world‘s largest carrier, said in a regulatory filing that its insurers have offered replacement coverage. The airline plans to obtain the replacement coverage before existing coverage is terminated. The report notes that American will be charged significantly larger premiums for this replacement coverage, and this new coverage will be in a substantially reduced amount for claims not involving aircraft passengers.
Thursday, September 27, 2001
 
Insurance Journal - American International Group announced its intention to offer coverage to airlines for war and hijacking (terrorist) risks through its member companies with total limits up to $1 billion. The decision comes in response to the severe economic disruption in the airline industry, not only in the U.S., but also in most other countries as a result of the abrupt cancellation of war and terrorist risk coverage. (See IJ Website Sept. 20), and subsequent moves by the governments of most countries, including the U.S., to guarantee sufficient funds to assure that coverage is provided in the short term. (See IJ Website, Sept. 24). The U.S., which was the hardest it by the tragedy, has committed to assure coverage for the next 6 months. Other countries have agreed to cover premium raises for shorter periods.
Wednesday, September 26, 2001
 
Insurance Journal - The governments of the U.S., the U.K. and the European Union rode to the rescue of the airline industry over the weekend when they announced separate decisions to help carriers cope with increases in premiums covering war risks and terrorist exposures, thus averting a global grounding of most flights, that could have begun at midnight tonight. The London insurance market, which insures a large proportion of the world‘s commercial aviation, gave seven days notice of its intention to cancel coverage, but stated that replacement policies could be obtained - at drastically higher rates (See IJ Website Set. 20). The rest of the world‘s aviation insurers announced similar plans.
Monday, September 24, 2001
 
Insurance Journal - The National Association of Mutual Insurance Companies (NAMIC) issued the following comment on a letter recently sent by the House Committee on Financial Services to the president of the National Association of Insurance Commissioners. (See insurancejournal.com National headlines, Sept. 20, 2001) "We appreciate the Financial Services Committee‘s interest in the well-being of the insurance industry and appreciate the offer of assistance. NAMIC is confident that its member companies will honor their contracts and will proceed to adjust and pay claims in a responsible manner just as they have done when other disasters have struck this country. Insurance employees are patriotic Americans and, after firefighters and police, are generally the first people to respond in a crisis, as they have been in this tragedy."
Friday, September 21, 2001
 
National Underwriter - Analysts are forecasting price hikes and broad market shifts in both the primary and reinsurance sectors, as well as reconsideration of the alternative markets as a result of terrorist attack losses. Rate increases are expected following the destruction of the World Trade Center in New York, said Matt Mosher, group vice president, property-casualty for A.M. Best in Oldwick, N.J. "It's an eye-opening event to underwriters. Their consideration of risk changed significantly [on] Tuesday," Sept. 11, he said. Because larger commercial companies will bear the brunt of the losses, there may be a "shift in competitive dynamics" going forward, added Adam Klauber, managing director of Cochran, Caronia Securities in Chicago.
Thursday, September 20, 2001
 
National Underwriter - The forces of two 767-planes flown deliberately into the twin towers of New York's World Trade Center destroyed buildings that were said to be able to withstand the force of a 707 crash. The property-casualty insurance industry is supposed to be solid enough to withstand the combination of several multi-billion events with capital to spare. But as the industry prepares to pay for the loss of life and property that tragically resulted from the Sept. 11 terrorist attacks, an obvious question is whether the industry will stay financially strong. Is an amount of capital that looked excessive just two weeks ago still enough to adequately protect policyholders of companies that will have to pay out claims related to the terrorist attacks?
Thursday, September 20, 2001
 
Claims Magazine - A Michigan trial court has dismissed an action by a school district seeking coverage of year 2000 remediation expenses from a statewide insurance pool. In School District of City of Royal Oak v. MASB-SEG Property and Casualty Pool Inc., Oakland Co. Circuit Court Judge Gene Schnelz agreed with arguments presented by the insurer that the district‘s costs to upgrade its computers did no constitute unexpected loss, as there had been warnings about potential Y2K problems long before January 1, 2000. Over a number of years, MASB-SEG had issued policies to the Royal Oak school district, as well as hundreds of others throughout Michigan. Coverage included damage or injury to property from faulty construction or design errors in computer programs and electronic data processing systems and equipment.
Wednesday, September 19, 2001
 
Insurance Journal - Chicago-based Aon Corp., the world‘s No. 2 insurance broker with about 1,100 staff in the World Trade Center, said on Friday that 200 employees remained unaccounted for after the Sept. 11 attack that destroyed the twin towers. "It grieves me to report at this time, despite all of our efforts, we have been unable to obtain information from any sources concerning the safety of approximately 200 Aon employees,' Chief Executive Patrick Ryan said in a statement. Besides the 1,100 workers in the World Trade Center, about 250 other employees were either traveling to New York or working in downtown Manhattan when the attack took place last week. The company said it is working with authorities to determine the status of all of its workers in the area.
Tuesday, September 18, 2001
 
Insurance Journal - The insurance industry will do everything it can to comply with the New York Insurance Department‘s advice to insurance adjusters and underwriters to exercise care and "responsible judgment" in judging claims arising from last week‘s World Trade Center tragedy. "While we certainly recognize the Department‘s concerns in these troubled times, our industry‘s approach is to always make our best efforts to settle claims in a proper and timely fashion," said Joseph Termini Jr., counsel for the National Association of Independent Insurers (NAII), whose member companies write more than 27 percent of the New York insurance market. "The Department can rest assured that insurers will do everything within their power to help those affected by this horrible act."
Tuesday, September 18, 2001
 
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