ILL. DIRECTOR CALLS IT QUITS:
Illinois Insurance Director J. Anthony Clark announced that he would step down from his post effective Feb. 13, according to the Associated Press. The constraints forced upon the insurance department by the state's budget and the bother of commuting between Chicago and Springfield—a three-hour drive—were factors in the decision, Clark said. He was appointed to the job less than a year ago by Democratic Gov. Rod Blagojevich and was handcuffed by Illinois' budget woes. Insurance industry lobbyists have complained steadily that Clark, a former life insurance counsel for Montgomery Ward, though hardly antagonistic toward or clueless about the insurance business was nonetheless quiescent with regard to the combination of department budget cuts and fees and taxes imposed on the industry last year. Clark did not oversee any major initiatives related to the property/casualty insurance industry in Illinois. The Illinois Insurance Department has 400 employees and the director receives $113,200 a year in salary. Gov. Blagojevich has not yet announced a replacement.
WELLS SCHOLARSHIP TO CINCINNATI SCHOOL AVAILABLE:
In partnership with Insurance Journal, the National Alliance School for Producer Development will award one scholarship for a full-tuition sponsorship to the upcoming Cincinnati, Ohio, School for Producer Development. The Matt Wells Scholarship for Producer Development was created to extend an opportunity to a deserving individuals to help them better serve their employers, their clients and the insurance industry by sharpening their sales skills and expanding their knowledge of insurance products and markets. The School for Producer Development is an intensive three-week series of insurance fundamentals courses and interactive sales training sessions. It is scheduled to take place April 4 through April 23, 2004, at the Hilton Cincinnati Netherland Plaza. The tuition scholarship, a $3,800 value, covers materials and instruction, pre- and post-course work and follow-up, and dinner each Wednesday night. Travel and accommodation expenses are not included in the tuition scholarship and may be substantial. For detailed information about the School for Producer Development, visit www.scic.com/producerschool/producerschool/cincinnati.htm. To apply for the scholarship, please complete the online application form or submit an application via mail, fax or e-mail to the attention of Alan Ring, vice president Wells Publishing. Questions and comments may be e-mailed to aring@insurancejournal.com. Applications must be received by Feb. 27, 2004. The scholarship winner will be selected and notified in early March 2004, and an announcement will be made in IJ's print magazine and Web site. The scholarship honors the memory of Matt Wells, the son of Insurance Journal publisher Mark Wells Jr.. Matt died of brain cancer in early 2002. He was 32.
MICH., MO. SHARED AUTO PLANS HAD UNDERWRITING LOSSES:
A new report by the Property Casualty Insurers Association of America (PCI) shows that residual market plans for private passenger auto insurance continue to result in significant losses for insurance companies, and Michigan and Missouri are two of the nine states whose residual market plans generated an underwriting loss in 2001. According to the report, the private passenger auto residual market increased from 1.5 percent of premiums nationwide in 2000 to 1.8 percent in 2001. That reverses a trend of annual declines in the residual market share since 1992 when it was 5.6 percent. In the vast majority of states, the market share is less than 1 percent, but seven states have more than the average market share. The residual market's loss ratio of 146.1 in 2001 was down considerably from 2000's 181.8, but still 75 percent higher than that year's private market ratio.
MINN. CRACKDOWN TARGETS HIGH-RISK DRIVERS:
Beginning in March, a new Minnesota law designed to get uninsured drivers off the road will require proof of insurance from both a random sampling as well as "problem drivers" who have previous convictions on their records. Half of the 70,000 mailings will go to drivers classified as high risks due to: at least one vehicle insurance law violation; a driver's license revocation or suspension due to habitual violation of traffic laws; no proof of insurance in effect at the time of a reportable crash; or an alcohol-related motor vehicle conviction. Drivers will have 30 days to respond with proof of insurance. The Minnesota Department of Vehicle Services estimates that as much as 15 percent of state's drivers are uninsured.
Q4 PROPERTY PREMIUMS DROPPED 9%:
Commercial insurance buyers say the cost of property insurance fell 8.8 percent in the fourth quarter of 2003, marking the first decline in premium prices in any major line of commercial insurance in nearly four years, according to the Risk and Insurance Management Society's (RIMS) Benchmark Survey of market conditions. Risk managers also said that, while still experiencing some price inflation, other commercial insurance products' price increases were either significantly lower than in the third quarter or those prices remained relatively flat, quarter over quarter, according to fourth-quarter renewal information summarized by Advisen Ltd. for RIMS. Leading indicators in the market, such as policy counts also suggest excess liability and director and officers liability premiums may be the next lines to experience declines in premium pricing. These developments reinforce the mounting evidence that the overall commercial insurance market, which had been weathering torrents of price increases since 2000, is calming and the hard market of the past few years is softening. The size of limits also declined by 4.4 percent. Other premiums continued to rise, but the rate of those increases slowed dramatically in some cases. For example, directors and officers liability, where increases neared 200 percent in 2003, the rate of increase slowed from 75 percent in the third quarter to just 17 percent in the past quarter.
S.D. SUED OVER COUNTERSIGNATURE LAW:
South Dakota is one of three U.S. jurisdictions whose countersignature laws are being challenged in court by the Washington, D.C.-based Council of Insurance Agents and Brokers. The statutes preclude out-of-state insurance brokers from conducting business in their jurisdictions without the countersignature of a resident agent. Lawsuits were filed in U.S. district courts in West Virginia and the U.S. Virgin Islands as well. Each suit argues that that jurisdiction's countersignature provisions violate the privilege and immunities clause of the U.S. Constitution. Last year, the Council successfully challenged the countersignature requirements in Florida and has now brought legal action in every state that has the controversial countersignature requirement on the books.
CORRECTION:
An article in the Jan. 26 issue incorrectly said Property Casualty Insurers Association of America (PCI) carriers write $154 million in annual premium. PCI carriers write $154 billion in annual premium.
WASH. PHYSICIANS MEET WITH LEGISLATORS TO DISCUSS MALPRACTICE CRISIS:
Steve Woods, MD, Overlake Hospital OBGYN and partner in a private medical practice, along with several of his Overlake Hospital and Evergreen Hospital colleagues, met in Olympia, Wash., recently to talk to King County Legislators about Washington's medical malpractice crisis and the need for tort reform. "Malpractice insurance rates for physicians are going up drastically in this state and unless something is done about the tort system, more doctors will have to close, move their practice to another state or drop their specialty," Woods said. "Unlike a normal business, we can't increase fees to cover the $60,000 to $80,000 per year malpractice insurance costs because our reimbursement rates are fixed and are not negotiable." According to the Washington State Medical Association, out of control jury awards and settlements are overloading the system and raising physician's insurance premiums to impossible levels. Consequently, doctors in this state are facing some tough choices: limit services, move out of state or close completely. Woods and his colleagues met with the following King County Legislators: District 5 — Senator Cheryl Pflug (R), Representative Glenn Anderson (R), Representative Jay Rodne (R); District 45 — Senator Bill Finkbeiner (R), Representative Toby Nixon (R), Representative Laura Ruderman (D); and District 48 — Senator Luke Esser (R), Representative Ross Hunter (D), Representative Rodney Tom (R). For more information on the Tort Reform, go to www.wsma.org.
