Flooded Maine family blames faulty federal maps

A family devastated by the Mother's Day flood that inundated their home along the Mousam River in Kennebunk, Maine, says errors in federal maps prompted them to forgo the purchase of flood insurance, a decision that came back to haunt them.

"It's just this massive nightmare," said Yetta Chin. "What we need is for someone to assume the accountability for what destroyed our lives."

Yetta and Steven Chin's small home in the Intervale Road neighborhood was hardest hit in the floods that forced them and their three children to seek temporary shelter at the local firehouse more than six months ago and eventually rent a duplex in Arundel.

The family, which had been living comfortably and paying its bills on time, now faces possible foreclosure on their home because of the $280,000 estimated cost of repairs.

Water rose 1 to 3 feet in some of the homes in the neighborhood, destroying floors, walls, septic systems and household items. Most residents had not purchased flood insurance, because federal maps erroneously failed to designate Intervale Road as being in a flood zone. But the river widened 360 feet beyond its usual course and flooded about a dozen low-lying homes on the road.

The flooding came as more than 15 inches of rain reportedly fell on parts of York County during a 30-day period, hitting hard at coastal towns between Kennebunk and York and inland areas near the New Hampshire border. Gov. John Baldacci declared a state of emergency in the county and President Bush declared a major disaster, funneling federal relief.

Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

NFL Steeler Webster's estate awarded disability benefits

The estate of NFL Hall of Fame center Mike Webster is entitled to collect more than $1.5 million in disability benefits because brain damage left him unable to work following his football career.

A three-judge panel of the 4th U.S. Circuit Court of Appeals upheld a Baltimore judge's order that the NFL pay Webster's estate benefits retroactive to the date of his retirement, plus interest and legal fees. The amount is reported to be about $1.5 million to $2 million.

The court said the board that administers NFL players' disability plan ignored evidence that the pounding Webster absorbed during his 16-year career left him totally and permanently disabled when he retired in March 1991. Webster died of a heart attack in 2002 at age 50.

From 1974 to 1988, Webster anchored the offensive line for a Pittsburgh Steelers team that won four Super Bowls. He played 245 games -- the most ever by a center -- and played every offensive down for six consecutive seasons, earning the nickname "Iron Mike." Webster finished his career with the Kansas City Chiefs.

"His remaining 11 years of life were plagued by a series of failed business ventures and stunted career attempts," Judge Allyson Duncan wrote in the opinion. Webster was homeless at times.
Associated Press © 2006.

State liquor store, homeowner blamed in N.H. drunk driving death

The family of a New Hampshire man killed in a drunken driving crash two years ago is suing the state Liquor Commission and the woman who owns the home where his friends were drinking.

Randy Holmes, 24, was a passenger in a friend's car when it crashed in September 2004. The driver, Matthew Kincaid, then 20, was charged with negligent homicide.

Holmes' family accuses the state Liquor Commission of illegally selling alcohol to Kincaid. The suit also names Mildred Dore, 83, whose grandson invited the other young men to her home.

According to court records, someone at the state liquor store in Hooksett sold vodka, rum and brandy to Kincaid, which the men drank at Dore's home. Late that night, another relative woke up Dore to tell her her grandson was having a loud party, leading to a confrontation in which Dore told the men to leave.

With Kincaid driving, the car hit a telephone pole.

Attorneys for Dore and the state Liquor Commission are fighting the lawsuit. They disagree that Dore should be held responsible for the crash. Dore's lawyer argues that a 24-year-old in the group actually bought the alcohol legally and that since Dore did not invite the men to her home, she had no obligation to protect them.

Declarations

Tort reform impact
"It's difficult to say whether tort reform measures have impacted this slow down in tort costs growth. We have yet to see what, if any, impact the class action reform legislation that was passed in February 2005 will have on future class action claims -- as well as whether the newly elected Democratic Congress will have an impact. What has certainly had an impact on tort costs trends has been the decade-plus decline in auto accident frequency, as the basic auto accident is the single largest portion of U.S. tort costs."

Russ Sutter, principal, Tillinghast business of Towers Perrin, on his 2006 Update on U.S. Tort Cost Trends showing the rate of growth of tort costs has slowed.

What really matters
"What we're trying to do is intensely focus this exercise on what really matters."

SEC Chairman Christopher Cox in explaining that federal regulators are moving to ease some financial-control rules for thousands of smaller public companies contained in Section 404 of the 2002 landmark Sarbanes-Oxley act. The changes would especially benefit smaller companies.

Pandemic claims
"While workers' compensation/general liability flu claims would go up, the workers' compensation/general liability non-flu-related claims would go down as businesses would shrink or close."

Al Fine, managing director, Willis Risk Solutions, who also said the avian flu is an emerging exposure, but it is too soon to tell whether it will be a Y2K or 9/11-type event.

Counterproductive in Cnn.
"Not only are these restrictions unwarranted, they are counterproductive since they will have an effect that is the precise opposite of what is intended."

Paul Tetrault, Northeast state affairs manager for National Association of Mutual Insurance Companies, on new rules issued by Conn. Insurance Commissioner Susan Cogswell restricting what mitigation efforts insurers may require of coastal property owners.

Sorry, 'snowbirds'
"Although Florida welcomes its many visitors, whether for short or extended stays, we cannot rewrite their out-of-state contracts."

Justice Raoul Cantero of the Florida Supreme Court in a decision that means "snowbirds" and other part-time Florida residents who insure their cars back home cannot make claims under Florida laws that may be more favorable to them than those in their own states. The ruling applies to crashes or other damages that occur in Florida.

It Figures

8%
The drop in premiums sought by the largest medical malpractice insurer in Maryland for next year in what would be its first rate reduction since at least 1992. The potential rate cut by Medical Mutual Liability Insurance Society of Maryland represents a big difference from 2004 and 2005 when rate increases of 28 percent and 33 percent sparked protests by doctors and led lawmakers to call a special session in Annapolis.

$25,000
That's how much a homeowner whose house is insured for $500,000 would be required to pay if a hurricane caused damage under a 5 percent deductible. Virginia Commissioner of Insurance Alfred W. Gross used the example in alerting property owners that several top insurers are imposing mandatory hurricane deductibles of 5 percent. Many of those same policies previously carried mandatory deductibles of 2 percent or 3 percent. "It is important that consumers recognize the magnitude of such a change in the terms of the policy," said Gross, who also reminded insurers they must notify customers of such a change.

-0.9% and -0.1%
The decreases in pure premium loss costs and assigned risk rates that become effective in Connecticut on Jan. 1, 2007.

$3 billion
How much it could cost to make Philadelphia's heavily traveled Roosevelt Boulevard safer. Converting the boulevard into a depressed highway or a conventional four-lane route with a median could cost up to $3 billion, Clarena Tolson, streets commissioner, told the City Council, which began looking into answers following four pedestrian deaths in just one month along the 14 mile roadway.

7,500
The number of pages of documents sought by seven insurers being asked to cover 57 clergy sex abuse claims by the Springfield (Mass.) Diocese. The insurers argued in Berkshire Superior Court that the 7,500 pages would enable them to see how the diocese handled allegations of sexual abuse by priests. But a lawyer for the diocese said the documents are protected by spiritual counseling privilege and free exercise of religion laws.

$261 billion
The total U.S. tort costs in 2005, which is approximately $880 per person and $4 less per person than in 2004, according to the "2006 Update on U.S. Tort Cost Trends" from the Tillinghast business of Towers Perrin. The growth rate of tort costs in 2005 was 0.5 percent, which is significantly lower than the growth rate of 5.7 percent in 2004 and 5.5 percent in 2003. The $1.1 billion increase over tort costs in 2004 is the smallest since 1997.

Insurers, agents worry Conn. coastal rules could make matters worse

Insurers aren't happy and agents are worried about new restrictions on coastal property underwriting being imposed by Connecticut Insurance Commissioner Susan Cogswell in a reversal of her previous policy. They warn that the rules could worsen the problem of insurance availability she is trying to fix.

Earlier this month, Cogswell decided that home insurers may no longer require permanently installed storm shutters as a condition for writing or renewing policies but must offer consumer choices of loss mitigation controls and deductibles. In a previous decision, she had permitted an insurer to require shutters.

Cogswell said her department found "there is an availability problem for homeowners insurance within the admitted markets for homes located within 1,000 feet of the coast." The report found that 59 percent of the market imposes mandatory mitigation requirements of some type for new business while the remaining 36 percent are offering a choice to new customers of mitigation or increased deductibles or no requirements at all.

Only 5 percent of the market requires mandatory shutters for renewal business. The remaining 91 percent is offering a choice or imposing no requirements.

Cogswell maintains she reversed the shutter policy and issued other recommendations in hopes of dealing with the availability problem before it gets worse.

But insurers say that Cogswell's restrictions on what mitigation steps they can require of coastal homeowners will only make them even less willing to write along the coast.

"Connecticut has a functioning homeowners insurance market in which property owners are able to obtain coverage. The department report found as much itself. Nevertheless, the report outlines onerous restrictions," said Paul Tetrault, Northeast state affairs manager for National Association of Mutual Insurance Companies.

According to Tetrault, the restrictions are the wrong way to go. "Not only are these restrictions unwarranted, they are counterproductive since they will have an effect that is the precise opposite of what is intended," he added.

According to Kristina Baldwin, regional manager and counsel for Property Casualty Insurers of America, Connecticut's new guidelines are "among the most restrictive in the nation."

Mitigation options
Under the rules on mitigation and shutters, consumers must be allowed to use a variety of loss mitigation measures recommended by the Institute for Business & Home Safety, including plywood shutters or impact resistant glass. Carriers may also apply a hurricane deductible.

If both loss mitigation measures and deductibles are imposed, companies are required to reduce the premiums or deductibles.

Companies will be able refuse to issue new policies for consumers who fail to take any of the mitigation measures but can only refuse to renew a policy if the insured refuses to employ any of the mitigation options (including plywood) and if the insured refuses to accept a hurricane deductible.

Cogswell is also recommending that the state create a voluntary Coastal Market Assistance Plan (C-MAP) in which risks could be presented to insurers on a voluntary basis for their consideration as an alternative for those who cannot afford loss mitigation measures and deductibles, or do not want an excess and surplus lines policy.

But if the voluntary approach of a C-MAP does not work, she said she will recommend that the FAIR Plan expand to offer a full homeowners policy.

The ink was barely dry on the recommendations, when the state's leading homeowners insurer, Allstate, announced it would stop selling new policies. (See related story on this page.)

While Allstate said its decision did not come about as a result of the new rules, its decision could exacerbate insurance availability problems.

"I hope we are not developing our own perfect storm scenario here. Companies are already struggling to figure out how to operate under the new coastal rules and now Allstate makes this announcement," said Warren Ruppar, executive vice president for the Independent Insurance Agents of Conn.

Attorney General Richard Blumenthal said Cogswell's new policy has come too late to help many consumers and that insurers' practices need to be more closely examined.

Mass. closes in on long-awaited transition to auto assigned risk plan

Final rules have been issued but will the new administration of Democrat Deval Patrick follow suit?

Massachusetts Insurance Commissioner Julianne M. Bowler has ordered the implementation of an assigned risk plan for the state's private passenger auto insurance market. The assigned risk plan will replace the existing pooling mechanism and establish new incentives for companies to fight fraud, according to Bowler.

Bowler's final order came after more than four years of delay and debate, including a unanimous Supreme Judicial Court decision in August which upheld her authority.

"Reform is long overdue. Massachusetts currently has the highest losses associated with high-risk drivers as compared to every other state," said Bowler. "By implementing the assigned risk plan, insurance companies will no longer be able to disassociate themselves from the policies that they transfer to the residual market. Companies will now be responsible for all their policies, forcing responsible management of losses and a greater incentive to fight fraud in the marketplace, which means lower rates for drivers."

The new ARP, called the Massachusetts Assigned Insurance Plan, is to be phased in over a three-year period as implemented by Commonwealth Auto Reinsurers, which administers the state's high risk system. On April 1, 2007, all new business that insurance carriers decline to write voluntarily will be placed in the MAIP.

However, as of April 1, 2007, carriers will not be permitted to non-renew so-called "clean-in-three" drivers for a three-year period. Bowler said this is meant to give the market the opportunity to design a permanent protection for these good drivers. "Clean-in-three" risks, about 75 percent of the current market, are those who have not had an accident or moving violation for three years.

On July 1, 2007, more risks will become eligible for the new plan, including drivers with 10 or more points that insurance carriers decline to write voluntarily.

Then on April 1, 2008, all other business (except "clean-in-three" risks) that insurance carriers decline to write voluntarily can be placed in the MAIP.

Bowler moved ahead with MAIP, which several domestic insurers opposed, while operating under a cloud of uncertainty regarding her own future. The industry is waiting to see whether the administration of incoming Gov. Deval Patrick will keep Bowler or otherwise go along with Bowler's plan. "I haven't had any communication," Bowler told Insurance Journal.

Would she stay on as commissioner if asked?

"It depends on what Governor-elect Patrick wants to do with the agency," she said. "If it's going to stay with its current business-like approach, then I'd have an interest. If it's going to go back to the days of certain political interests controlling this agency, I have no interest in that."

Spitzer taps investigator Dinallo to be N.Y. insurance chief

Incoming New York Gov. Eliot Spitzer will nominate Eric Dinallo, a former lead investigator in his office of attorney general and currently general counsel of Willis Group Holdings, to be superintendent of insurance.

Dinallo worked with Spitzer from 1999 to 2003, during which time he headed an investigation into investment research firms for potential conflicts of interest. Dinallo is currently general counsel for global insurance broker Willis Group Holdings Ltd., and member of Willis Partners Group. In 2003, he joined Morgan Stanley's regulatory affairs department, and this past March moved to Willis.

Dinallo is a graduate of Vassar College and New York University School of Law.

If confirmed, he will replace Howard Mills, who called Dinallo an "outstanding choice" and promised to cooperate in a smooth transition.

Arson convictions now being questioned

A handful of arson convictions that relied largely on expert testimony are being re-examined because of changes in the scientific understanding of fire. Some are already in court, while in others, defense teams are putting together a case. Among the cases identified by different investigators and lawyers working on these new challenges to arson:

• Louis C. Taylor, sentenced to life for a 1970 fire at the Pioneer Hotel in Tucson, Ariz., that left 29 people dead. Prosecutors alleged the then 16-year-old Taylor set the fire so he could steal from hotel rooms. The Arizona Justice Project is preparing a court petition to seek a re-examination of the evidence against him.


• Kenneth Richey, who spent 20 years on death row for a 1986 fire in Columbus Grove, Ohio, that killed a toddler. A federal appeals court overturned his conviction, raising questions about whether the fire was arson at all, but the U.S. Supreme Court last year reinstated his conviction and death sentence.


• Greg Brown, convicted of arson and murder, and his mother, Darlene Buckner, convicted of insurance fraud, for a 1995 fire in Pittsburgh that took the lives of three firefighters. The Innocence Institute at Point Park University in Pittsburgh is working on the case.


• George Souliotes, sentenced to life in prison for a 1997 fire in Modesto, Calif., that killed a mother and her two children. Souliotes, a landlord, had been trying to evict the family and investigators claimed he was trying to collect insurance money. The California Supreme Court rejected his latest appeal.


• Letitia Smallwood, sentenced to life in prison for a 1972 apartment house fire in Harrisburg, Pa. Prosecutors alleged that she started the fire because she was angry with her boyfriend and his live-in girlfriend. The question of arson was never originally disputed in court by her defense attorney.


• Garland Leon "Butch" Martin, sentenced to three life sentences for the deaths of his common-law wife and her two children in a 1998 fire in Midland, Texas. Defense experts contend investigators ignored evidence of an accident.

Report recommends phase-out of Pennsylvania med-mal subsidies

Pennsylvania should get out of the medical malpractice insurance business and return the medical malpractice market to the private sector as soon as possible, according to a recent report.

Insurance Commissioner Diane Koken unveiled the Medical Care Availability and Reduction of Error (Mcare) Commission final report, which offers recommendations on the future of the state's program that helps pay certain catastrophic medical malpractice claims for doctors and other healthcare providers.

"The commission's recommendations center on two initiatives," said Koken. "The first is implementation of a realistic plan to phase out the Commonwealth's Mcare Fund program and return all medical malpractice insurance coverage to the private market as soon as possible. This is a move that is strongly supported by physicians and hospitals.

"The commission also supports continued use of the public funds that are currently dedicated to the Mcare abatement to keep costs manageable until the Mcare Fund is phased out and then ease the transition and impact on health care providers as the Mcare Fund is replaced by the private market," she added.

The commission's membership included eight private citizen appointees selected by the leaders of the General Assembly as well as Koken and the state's budget and revenue secretaries.

Highlights of the commission's recommendations include:

• To continue the state's Mcare abatement program which subsidizes health care providers' catastrophic malpractice claims payments until Mcare coverage has been phased out. The Mcare abatement program was initially proposed by Governor Edward G. Rendell in 2003 to encourage health care providers to continue practicing in the Commonwealth and has defrayed nearly $1 billion of malpractice expenses for Pennsylvania health care providers;


• To privatize Mcare malpractice coverage as directed under the Act 13 of 2002 as soon as is feasible, ideally in the period between 2008 and 2011. Currently, most health care providers are required to buy $1 million in malpractice coverage; the first $500,000 from the private market and the remaining $500,000 from the government-run Mcare Fund;


• To eliminate the Mcare assessments paid by health care providers to support the Mcare Fund once private insurers begin covering the entire amount of required malpractice insurance, thereby reducing health care providers' medical malpractice costs;


• To use the public funds currently committed to the Mcare abatement program to retire the unfunded liabilities of the Mcare Fund, once the Mcare program ends;


• To use any remaining currently committed public funds to mitigate increases in health care provider malpractice insurance costs, with a target of limiting the maximum increase in aggregate medical malpractice liability insurance costs in Pennsylvania to 10 percent annually; and


• To aggressively promote health care quality initiatives, which will, among other things, reduce future malpractice expenses and maximize public funds that can be dedicated to health care services.

Practical ideas
Koken said the report contains "practical and achievable ideas for consideration by the legislature and the Governor."

Mcare pay-outs have declined for the third consecutive year. The two largest private medical malpractice carriers have not increased their base rates in two years and over the past four years, four new insurance companies and 29 risk retention groups have started writing med mal insurance in Pennsylvania. The number of physicians practicing in Pennsylvania has remained constant at about 35,000, and the number of medical malpractice cases filed has dropped nearly 38 percent since 2003.

In 2006, the Mcare Commission held six meetings and hosted a public hearing. Commission members included: Commissioner Koken; Budget Secretary Michael J. Masch; Revenue Secretary Gregory C. Fajt; Sen. Gibson E. Armstrong; Rep. Steven R. Nickol; Joseph G. Cesare, MD; Steven A. Shapiro, MD; Joshua Port, MD; Don Matusow, Esq.; and David F. Simon, Esq.

The Mcare Program is operated under the provisions of Act 13 of 2002 and is administered by the Pennsylvania department. Its purpose is to ensure reasonable compensation for persons injured due to medical negligence in cases where claims fall in the range from $500,000 to $1 million per claim.

How to hold your ground against the Internet marketers

Just because some individuals purchase policies over the Internet doesn't mean that everyone is similarly inclined. Many personal lines prospects simply aren't comfortable buying their insurance online or over the phone, at least not yet. This uneasiness gives local-only agents the time and opportunity to appeal to consumers who prefer to do business face-to-face with a nearby professional -- instead of having to stare down a computer monitor or disclose personal facts to a distant, disembodied voice.

Fortunately, it is still possible to distinguish neighborhood agencies from their better-financed, nationally-advertised competitors. The formula for this differentiation is the promotion of selected agency services that Internet insurance marketers cannot physically perform.

Here are several low-cost methods to help you to accomplish this.

Make old-fashioned house calls
This seemingly quaint throwback to the pre-Internet era is still a powerful tool. Almost nothing is better for sales than to be a welcome guest in someone's home. Your agents or CSRs have the rare chance to see all of a family's policies at once, as well as how they live. Furthermore, your prospects never feel more comfortable than they do in their own house. Plus, the people you close at home often stay your clients longer because of this one-time person-to-person encounter. Still, house calls are time-consuming and expensive. So make certain that if you agree to go house-hopping, that you are guaranteed the opportunity to review a prospect's complete insurance portfolio. Never agree to stop by just to sell a single auto or homeowners policy unless it's sizeable or an authentic lead-in to additional business.

Promote hands-on contact
Advertise the fact that "strangers over the Internet," a strong and intimidating phrase, can't hand you a claim check, personally look out for your best interests, visit your home, etc., (motorized claims teams, notwithstanding). Then appeal to your prospects by featuring a heartwarming photo in your ad. Run it regularly in publications not generally read by technophiles, such as your local shopping news.

Snap pictures
Immediately after a new auto or home client signs the application and hands over a check, immortalize the transaction by snapping a picture. Invite your new policyholder to stand next to their CSR for a digital or classic Polaroid photo. Write the rep's name, number, and e-mail address on the back of the printed picture. The CSR then hands it to the insured, saying something like: "This is so you'll always know that I'm here to help you." The purpose of the exercise is to build a connection between the insured and the rep, their main agency contact. Politicians have used photos as bonding tools for years. A famous example is when John Street used it during the 1999 Philadelphia, Penn., mayoral election. He had instant pictures taken with his arms around voters that he met on the street by his "Polaroid Posse." This personal interactivity helped. Mr. Street won a close election that year and is still mayor to this day.

Deliver retro quotes
Online quotes consist of nothing more than computer-generated numbers on a PC monitor or a paper printout. There is nothing special about this style of delivery, which gives you an opportunity to distinguish yourself while proposing the bottom line. Here's how to take advantage of your local presence.

When sitting face-to-face with a personal lines prospect, your reps shouldn't simply hand a raw rate quote, fresh from the printer, to the individual. Instead they should take the extra time to hand transfer the automated numbers onto an agency-created quote form, one that has blank spaces for the CSR to manually enter in the person's desired policy limits, deductible, form, premiums, etc. It's most effective when the coverages are recapped and the numbers are explained to the person who is sitting there as they are written onto the page. This old school presentation style is far more memorable than mere online output.

Conclusion
With all of the above, it may seem like you are reading a trade magazine from the 1960s. Relax, it's almost 2007. Check the date on the cover if you're still not sure. Of course it's important that you post and maintain a quality agency Web site, one that's much more than an online billboard. Your site is another important tool, perhaps the most important one, to compete against the major Internet marketers. Unfortunately, there's not enough room on this page to explore your agency's Internet options. Perhaps in a future column. For now, just think about the offline things that you can do to attract the personal accounts of all of the people who prefer to insure locally. There are a lot more of them than you may have realized.

Alan Shulman, CPCU, is the publisher of Agency Ideas, a subscription-only sales and marketing newsletter. He is also the author of the 1001 Agency Ideas book series and other popular P/C sales resources. He may be reached at 800-724-1435 or by e-mail at: shulman@agencyideas.com. His Web site is www.agencyideas.com.

Impact of Enron on directors and officers insurance

Perceived risk drives the market for directors and officers liability insurance. Even before the Enron crisis, it was becoming much more difficult for financial institutionss to obtain affordable D&O insurance. Enron not only exacerbated existing trends in the marketplace; it was the impetus for a new wave of change.

The following trends are a result, at least in part, of Enron's collapse:

• Shifts in the risk assessment model;


• Heightened scrutiny of internal controls;


• An increased focus on independence;


• Active involvement by outside directors and corporate counsel in the insurance process;


• The increased costs of obtaining insurance.

October, November see 29 M&As; stock prices continue to vary

Stock Prices:
Stock prices have varied year-to-date among brokers. Brown & Brown Inc.'s (NYSE:BRO) stock was down 4.4 percent through Nov. 30, 2006, while Hub International Ltd.'s (NYSE:HBG) stock was up 19.2 percent for the same time period. Holding the middle ground are Willis Group Holdings Ltd. (NYSE:WSH) and Hilb Rogal & Hobbs Co. (NYSE:HRH) who are having very respectable years, up 11.2 percent and 9 percent respectively. During the third quarter of 2006, Hub reported a 29 percent increase in revenue for the quarter. Hub's U.S. brokerage revenues grew 35 percent to $90.7 million from $67.2 million a year ago. Organic growth only contributed 1 percent to the overall revenue growth for the quarter. The slow organic growth is evident in Hub's robust acquisition activity year-to-date, with 11 announced acquisitions including the $83 million acquisition of three agencies from The Royal Bank of Scotland Plc. Willis Group Holdings Ltd.'s stock has performed well as the market responds favorably to the company's "Shaping our Future" expense initiative, similar to Aon's restructuring announcements during 2005. Willis' net income for the nine months ended Sept. 30, 2006, was $301 million, compared with $226 million a year ago. These results were significantly affected by the gain in the sale of the company's London headquarters and the aforementioned future initiatives.

M&A Activity:
Sixteen more acquisitions were announced in November, bringing the year-to-date total to 160. Six of the sixteen acquisitions were made by commercial banks. Tompkins Trustco Inc. (AMEX:TMP), Alaska USA Federal Credit Union, First Niagara Financial Group Inc. (Nasdaq:FNFG), Wells Fargo & Company (NYSE:WFC), Community Banks Inc. (Nasdaq:CMTY), and BB&T Corporation (NYSE:BBT) all announced acquisitions in November. As usual middle market brokers were also in the acquisition mix. Arthur J. Gallagher & Co. (NYSE:AJG) announced two acquisitions which bring their total for the year to nine. USI Holdings Corporation (Nasdaq:USIH) also had nine acquisitions year-to-date following the announcement of the purchase of Carlson Group Inc., a Clifton Park, N.Y.-based insurance agency.

M&A activity was slower in October with 13 acquisitions announced. One acquirer was responsible for five of the acquisitions. Berkshire Hills Bancorp Inc. (Nasdaq:BHLB) announced plans to acquire five Western Massachusetts insurance agencies: Reynolds, Barnes & Hebb and McCormick, Smith & Curry Insurance Agency, both of Pittsfield; Minkler Insurance Agency of Stockbridge; H.S. Andrews Insurance Agency of Great Barrington; and MassOne Insurance Agency of Greenfield. Each insurance agency will retain its name, identity, management and personnel, but will operate as a division of Berkshire Insurance Group.

In the largest deal in October, USI Holdings Corporation (Nasdaq:USIH) announced it entered into a definitive agreement to acquire Seattle, Wash.-based Kibble & Prentice Holding Company. Kibble & Prentice is expected to contribute approximately $37 million of revenues to USI on an annual basis. Kibble & Prentice is one of the largest independent insurance brokers in the Pacific Northwest and has a diversified revenue mix with approximately 44 percent of revenues derived from property/casualty, 34 percent of revenues from employee benefits and 22 percent of revenues from other financial services. According to SEC Filings, USI paid $83 million upfront with an additional potential earn-out over three years.

LMC Capital LLC is a national investment banking firm focused exclusively on the insurance industry. Services include highly-qualified, industry-specific advisory relating to mergers and acquisitions, capital raises and valuations. The firm may be contacted at 704-943-2600, by e-mail at Info@LMCCapital.com or visit www.LMCCapital.com.