MO. COURT STRIKES DOWN MANAGED CARE COMP RULES:

A Missouri court has ruled against the Missouri Department of Insurance, enjoining the department from enforcing rules requiring workers' compensation insurers to pay for managed care organizations' services, even if the insurers had no contract with the MCO. In Alliance of American Insurers v. Missouri Department of Insurance, No. 02-CV-325517 (Cole County, Missouri Circuit Court), the Alliance argued that an employer's right to select a health care provider under Mo. Rev. Stat. § 287.140(10) does not equate to an employer's right to choose its MCO.

Further, even if an employer has the right to choose its MCO, an insurer should not be required to reimburse the MCO for managed care fees for claims involving injured employees unless there is a contract between the MCO and the workers' compensation carrier. The Alliance also contended that the rules were an attempt to benefit some domestic MCOs.

INDUSTRY GIVES BIG TO OHIO JUSTICE:

Insurance industry interests contributed nearly $200,000 to the campaign of Ohio Supreme Court Justine Maureen O'Connor. Ohio's top court, with O'Connor's help, recently overturned a previous ruling of its own, the Scott-Pontzer v. Liberty Mutual decision, which had extended commercial passenger auto insurance coverage to injuries sustained while the driver was not working. Both agents and companies contributed heavily to O'Connor's campaign, according to the Associated Press. O'Connor raised $1.7 million in campaign funds total, the news agency reported.

FLA. CARRIER'S MINN. DONATIONS UNDER INVESTIGATION:

The efforts of Miami-based American Bankers Insurance Group to affect the outcome of Minnesota's 2002 elections is being investigated in two different counties in the state, according to the Associated Press. American Bankers, now part of the Assurant Group, which in turn is a subsidiary of Fortis, is part of an investigation for its financial contributions to the campaign of Republican Gov. Tim Pawlenty.

Under Minnesota law, companies are barred from making or offering to make donations to help elect or defeat a particular candidate. The question is being investigated in Mower County. A grand jury there indicted state GOP Chairman Rob Eibensteiner, executives Henry Bassett Jr. and Jerome Atkinson in October, and was investigating $15,000 in donations to Pawlenty's campaign offered by American Bankers. A report by Special Counsel E. Thomas Sullivan calls for a broader investigation covering attempts by the carrier to aid two Democrats, gubernatorial challenger Roger Moe and Attorney General Mike Hatch. Now the matter has been referred to Ramsey County Attorney Susan Gaertner, who said she and her staff are attempting to determine if it falls within the county's jurisdiction.

MO. CRACKS DOWN ON AGENT TAX CHEATS:

Missouri's House Bill 600 has taken effect, requiring persons with professional licenses to file and pay their state taxes or face license revocation. Affected under the legislation are Missouri Department of Insurance licenses to more than 100,000 insurance producers and public adjusters. The Missouri Department of Revenue's first sampling of insurance producers and public adjusters for compliance with HB 600 reportedly produced a significant number who have failed to pay taxes and face revocation. Individuals who receive a Department of Revenue notice about noncompliance should call that agency at (573) 751-7200. MDI said it cannot provide any assistance and will refer all contacts to the Department of Revenue.

OHIO MOVES CLOSER TO ASBESTOS REFORM:

The Alliance of American Insurers is encouraging Ohio lawmakers to seize the momentum and act quickly on legislation dealing with tort reform and asbestos litigation reform. The Ohio House approved HB 292, which addresses key issues related to improving the way in which asbestos-related cases are handled. SB 80, passed by the Senate in June, combines more wide-ranging tort reform with asbestos litigation reforms.

N.D. WORKERS INSURANCE DIRECTOR SACKED:

North Dakota's director of Workforce Safety and Insurance was fired last October by the agency's board of directors, according to the Bismarck Tribune. Brent Edison had headed up the agency since January 2002 and had previously served as vice president of fraud investigations with the agency.

Board chairman David Ystebo told the Tribune Edison, paid $112,212 annually, was not meeting the board's expectations. The board had recently received letters and e-mails, some anonymous, claiming Edison "had responded angrily to some suggestions and ignored complaints about other top administrators," according to the Associated Press. A call by Insurance Journal to a Bismarck resident listed under the name Brent Edison was not returned.

CINCINNATI FINANCIAL MAY RELEASE AS MUCH AS $75 MILLION IN RESERVES:

Cincinnati Financial Corp. announced that the Ohio Supreme Court's recent reversal of its Scott-Pontzer decision could result in the release of approximately $75 million in uninsured motorist/underinsured motorist reserves. This amount would include some Cincinnati Insurance Co. reserves for losses incurred but not yet reported as well as case reserves for reported claims, including approximately $6 million in case reserves released in November 2003.

Because the court still must rule on motions to reconsider the reversal, the company believes it is premature to release all Scott-Pontzer-related reserves or specify the timing of their potential release. In the Nov. 5, 2003, decision, the court ruled that an employer's commercial automobile insurance policy only covers injured employees and only when the accident happens in the course and scope of their employment. UM/UIM claims dating back as far as 15 years would be affected by the court's recent decision.

CNA POSTS $1.8 BILLION Q3 LOSS:

Chicago-based commercial lines insurer CNA Financial Corp. reported a net loss for the third quarter of 2003 of $1.8 billion, or $7.94 per share, as compared with net income of $54 million, or 24 cents per share, for the same period in 2002. The net loss for the nine months ended Sept. 30, 2003 was $1.6 billion, or $7.39 per share, compared with net income of $105 million, or 47 cents per share, for the same period in 2002. The net prior year development consisted of $978 million after-tax related to core reserves and $517 million after-tax related to asbestos, environmental pollution and mass tort reserves.

The primary factors that led to the net prior year development were the previously announced third quarter of 2003 comprehensive reserve reviews, which included construction defect and other volatile exposures, and a ground up analysis of APMT exposures. The net prior year development also resulted in additional cessions to the company's reinsurance contracts, including the corporate aggregate reinsurance treaties. These additional cessions resulted in $67 million of after-tax interest expense, which is recorded as a reduction in net investment income.