MINN. AG OUTLINES LEGISLATION ON BROKER OPERATIONS:

Minnesota Attorney General Mike Hatch has proposed a series of sweeping rules regulating how brokers would operate in the Land of 10,000 Lakes. Hatch, a Democrat, has found compatriots in the Minnesota legislature to propose legislation in the upcoming session that would require brokers to disclose the names of each company contacted for quotes and what the quotes were.

The legislation would also clarify as a matter of state law that insurance agents and brokers are legally bound to serve the best interests of the customer, not the carrier. A second bill would require insurers to give quotes to multiple producers on the same risk, if the client so chooses. Hatch said the proposed legislation would help curb the type of fraudulent activities uncovered by New York Attorney General Eliot Spitzer. Mark Kulda, a lobbyist with the Insurance Federation of Minnesota, told the Associated Press that having to redo a bid with different producers would increase the cost of doing business and increase prices.

S.D. INSURERS ASK STEUCK TO SPIKE CREDIT SCORING BILL:

South Dakota draft legislation regarding credit scoring is unnecessary, burdensome and would open the door for even more restrictive alternatives in the legislature if introduced, a leading industry representative has told Insurance Director Gary Steuck. The draft legislation, DRR26, would hew closely to the National Conference of Insurance Legislators' model act on credit scoring and supersede the state's current bulletin on the matter, according to Mark Heyde, president of the South Dakota Insurance Alliance.

In a message to supporters, Heyde said the status quo, arrived at via "a working committee of insurance companies, agents and regulators," seems to be working and that "there is definitely an increased cost of doing business for insurance carriers" if an NCOIL-type model is enacted. Heyde appeared most concerned that proposing such a bill, mild as it might be, in the legislature "will again open the door for legislative discussion on a topic that is hard for anyone outside of our industry to fully understand."

OHIO COMP MEDICAL COSTS DOWN 6.7%:

The Ohio Bureau of Workers' Compensation announced recently that paid medical costs for workers' compensation claims were down 6.7 percent, about $15 million lower than expected for the first quarter of fiscal year 2005. From July 1, 2004, through Sept. 30, 2004, the bureau paid nearly $213 million in medical costs, which is more than $4 million less than BWC spent from July 1, 2003, through Sept. 30, 2003. These real savings occurred despite medical inflation rising 4.4 percent over the past year. BWC Administrator James Conrad touted the news as a continued success for Ohio's workers' comp system.

An outside actuarial firm prepares the expected payments using the payment patterns, trends and development factors for the past five years. The firm projected payments of $228 million for the first quarter of fiscal year 2005. The most significant areas of savings were chiropractic costs, which were 9.4 percent lower than expected, and rehabilitation expenses, which were 7.9 percent lower.

N.D. COMP BOARD ADOPTS 5% RESERVING DISCOUNT:

The board of directors of North Dakota's monopoly workers' compensation provider, Workforce Safety and Insurance, voted to adopt a 5 percent discount in calculating the WSI reserve fund. The board also recommended that $250 million be held for unexpected developments in the future.

The reserve fund is the money set aside to cover the cost of all current workers' compensation claims. The dollars set aside in the reserve fund pay for both wage-loss and medical benefits to the injured workers of North Dakota, in the event that WSI would be dissolved. Some of WSI's active claims stretch back into the 1930s. The reserve fund is an estimate of what the cumulative future payments will be for all active injured worker claims.

ILL. DOI SUBPOENAS QUOTESMITH .COM ON BROKER PRACTICES:

Darien, Ill.-based online direct-to-consumer life insurer Quotesmith.com Inc. announced that it has received a subpoena requesting documents and seeking information from the Illinois Division of Insurance. The company said it intends to cooperate fully with the department. "Quotesmith.com conducts its insurance brokerage business with high standards of ethical behavior," CEO Robert Bland said in a statement. "We have no customer complaints on hand and have no knowledge of any wrongdoing by any of our employees."

CNA SURETY POSTS $11 MILLION Q3 PROFIT:

Chicago-based CNA Surety Corp. reported net income for the third quarter of 2004 of $11 million, or 26 cents per share, compared to a net loss of $47.4 million, or $1.10 per share, for the same period in 2003. The company, whose principal subsidiary is the Western Surety Co., said the increase in net income reflects higher net earned premium, higher investment income, and the absence of material adverse loss development which occurred during the third quarter of 2003.

For the third quarter, gross written premiums increased 8.4 percent to $102.2 million. Contract surety gross written premiums increased 8.3 percent to $61.6 million due to volume growth. Commercial surety gross written premiums increased 8.6 percent to $32.5 million due to continued strong volume growth in small commercial products. CNA Surety has continued to do well while its parent company's insurance operations have floundered.

BROOKE'S Q3 UP 71% FROM A YEAR AGO:

Overland Park, Kan.-based agency franchise network Brooke Corp. saw its third-quarter profit jump to $1.4 million, or 14 cents per diluted share, up 71 percent from last year's $822,000, or 8 cents per diluted split adjusted share. Quarterly revenues increased 48 percent to $26.1 million in the third quarter of 2004, up from $17.7 million in the third quarter of 2003. CEO Robert D. Orr attributed the earnings uptick to fees from consulting on the acquisition, conversion and start-up of new franchise locations.