MASS. TRANSIT SYSTEM RENEWS TERRORISM POLICY

The Boston-area public transit agency, the Massachusetts Bay Transit Authority, has renewed its terrorism insurance policy.

The policy includes a $350,000 deductible and would cover up to $500 million in damage to MBTA property, or about 10 percent of the total value of its trains and other holdings.

MBTA General Manager Daniel Grabauskas told The Boston Globe that after Sept. 11, the possibility of future terrorists attacks can't be ignored. "Terrorism is one of those new man-made realities that we need to insure against," he said.

The Big Dig project and the state's turnpike and airport authorities also carry terrorism insurance.

N.Y. CITY EYES

New York is considering installing surveillance cameras in Lower Manhattan in its fight against terrorism, similar to the "ring of steel" in London.

Police department experts visited London in the fall to look at its system of closed-circuit cameras posted at points in its financial district and near landmarks. Those cameras helped London police quickly provide images of suspected bombers during the terror attack in the London Underground last summer.

The city already has 1,000 cameras in its subways, with plans to add another 1,000 surveillance cameras and 3,000 motion sensors over the next three years.

IN MAINE, DON'T LINGER ON THE FRONT PORCH

David Luxton awoke to the sound of shattering glass as a car smashed into his porch during the night. Less than 48 hours later, another car knocked his porch off its foundation.

All told, vehicles careening out of control on a curve on U.S. 2 in Bethel, Maine, have damaged Luxton's house four times since 1975, he said. That doesn't include vehicles that ended up on his property but missed the house.

Motorists are traveling downhill when they enter the curve. Cars sometimes spin toward his house; large trucks tend to crash into the guardrail and topple over, away from the house. Over the years, those have included a tractor-trailer loaded with beer, logging trucks, and a car carrier loaded with pickup trucks.

Maine officials plan to move the highway 60 feet farther from the house and reshape the curve this summer, he said. But Luxton will keep the porch, just to be safe. "In a way, it's my safety barrier," Luxton said.

AIG WINS RESTRAINING ORDER AGAINST GREENBERG

A New York judge has granted American International Group a restraining order against its former chief executive officer, Maurice Greenberg, and his agency, Starr Technical Risk Agency, that bars Starr from placing its AIG risks with other insurers.

The judge said his restraining order would remain in effect until the parties settle their differences in arbitration.

AIG maintains that Starr Technical and AIG have had an exclusive contract since 1992.

C.V. Starr says that AIG is trying to keep its agency from competing. Starr claims that its agency is free to write accounts with other carriers when AIG is not competitive.

R.I.'S BEACON MUTUAL UNDER SCRUTINY

Rhode Island's leading workers' compensation carrier is facing an audit and a probe into a whistle blower's allegations as it pushes for legislation opposed by the Carcieri administration.

Department of Business Regulation Director A. Michael Marques told The Providence Journal that regulators are conducting a routine audit of Beacon Mutual Insurance Co.

Gov. Don Carcieri, who opposes legislation sought by the firm, made public allegations from an anonymous informant who said Beacon granted certain companies preferential rates. One company was owned by a man on Beacon's board. A report by auditors hired by Beacon said they found no evidence of wrongdoing by the firm or its employees.

WHEN THE NONPROFIT

While nobody wants to report a loss, there are several insurers that are not bothered if they don't report a profit. They serve the nonprofit market and are themselves nonprofit organizations.

One of the nonprofit insurers in the market is the Alliance of Nonprofits for Insurance, Risk Retention Group (ANI-RRG), a Vermont-domiciled risk retention group. ANI-RRG is currently writing coverage for 501(c)(3) nonprofits in Colorado, Connecticut, Delaware, District of Columbia, Iowa, Kansas, Maryland, Michigan, Missouri, Nebraska, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia and Washington.

ANI-RRG and the Nonprofit Insurance Alliance of California are part of a group that also includes the National Alliance of Nonprofits for Insurance, a captive reinsurer, and Alliance Member Services, a management company. They are themselves tax-exempt organizations.

No surprises
"Having written 501 (c) (3) nonprofits exclusively since 1989, we don't see much that surprises us," says Pamela Davis, founder, president and chief executive officer.

But her organization's approach to underwriting might surprise for-profit insurers. Her underwriters rarely see an account they won't price or renew. "When we write an account, it is generally with the expectation that we will be able to provide them with the variety of coverages we offer. It is our policy to underwrite and price appropriately rather than to exclude the tough coverages when the insured has the exposure," she said.

According to Davis, the approach has resulted in a renewal rate in excess of 90 percent and a roster of satisfied customers.

"We are also accountable to the public in the same way that our members are," Davis commented. "Our members value stability in pricing and have an expectation that they will not be non-renewed because of a single claim. Instead of focusing on 'what the market will bear,' we focus on what works best for our members and their brokers. We value the confidence our member-insureds place in us because we are, like them, a part of the nonprofit sector."

For more information on the company, visit www.ani-rrg.org.

WHAT E&S BROKERS PAY

More than three-quarters (77%) of wholesalers and brokers said that firm salaries increased in 2005 compared to 2004. Nearly half (49%) of all E & S firms answering Insurance Journal's survey reported paying their producers a combination of salary plus commission.

The majority of firms (80%) reported that commission rates stayed right where they were in 2005 compared to 2004.

Most firms (50%) received 16% to 20% for new policy commission from insurers in 2005 for small commercial, while 20% of those who responded to the survey receive 11% to 15% in commission. A third (33%) said they received 11% to 15% in commission for new large commercial, while another 31% receive 16% to 20% in commission. On average, renewal policy commission rates remained the same.

The majority of firms paid retail agents 6% to 10% commission for new and renewal commercial policies in 2005, both small commercial and large commercial.

Nearly all (92%) of the E&S wholesale firms and brokerages have plans to acquire another firm in 2006, which could turn out to be a challenge since only 13% plan to sell.