REGULATORS MUST KEEP PACE
Steve Sheffey, counsel for Allstate Insurance Company, told insurance regulators April 24 in Scottsdale, Ariz., that they need to keep pace with gains in the technology field by forming regulations that reflect consumers' ability to make the most of the Internet in an even greater way in the insurance marketplace. Speaking at the National Association of Independent Insurers' 2001 Underwriting Seminar, Sheffey noted that "Consumers are the final arbiters of what rates and products are appropriate. They are bombarded by ads, have access to hundreds of insurers over the Internet and are in the best position to determine what is best for their unique situations." In further remarks Sheffey noted that the number of options available to the public is endless. In his final thoughts, Sheffley stated that underwriting executives need to firmly urge regulators, actuaries, insurers, and consumers to re-think those assumptions which haven't been thought through, were once workable 40 or 50 years ago, but in this day and age prove worthless.
HURRICANE EXPO SET
The second annual Hurricane Preparedness Expo is scheduled for June 2 in Savannah, Ga. The expo coincides with the beginning of the hurricane season—June through November. Official sponsors are The Home Depot, Insurance Commissioner John W. Oxendine and the Georgia Insurance Information Service. The expo was developed to educate citizens on how to make their homes, businesses and communities more resistant to severe weather damage. It brings people and resources together in one location for instruction, demonstrations, hands-on training and discussion. Last year, 41 exhibitors took part including representatives from local, state and federal emergency management agencies; local fire and police services; utility companies; the American Red Cross; the U.S. Coast Guard; several local hospital facilities; the National Weather Service; and a number of manufacturers of building products and tools. Insurance company representatives from Allstate, GEICO, Georgia Farm Bureau, Liberty Mutual and State Farm will also be on hand to discuss weather-related insurance coverage and procedures for filing claims in the event of a storm loss. Exhibitors may participate for free, but are asked to register in advance.
INSPIRE SELECTS MERANT
Fort Worth-based INSpire Insurance Solutions, a property/casualty insurance outsourcing services provider, announced it is using a new software configuration management (SCM) application to speed software development and improve customer service quality. PVCS® Dimensions, developed by MERANT, a global e-business software company, was designed to facilitate process management by establishing roles, the transitions between roles and automating workflow. As a result, INSpire hopes to improve the time-to-market for new insurance applications and improved customer service delivery. INSpire is in the process of implementing PVCS Dimensions with its internal customers. By the end of June, the company plans to have all customers using PVCS Dimensions for change management.
SENATE OK'S PROOF OF INSURANCE
The Texas State Senate voted to pass a bill which would select at random 500,000 of the state's 14 million motorists each year and require them to prove they have insurance to drive an automobile. The Dallas Morning News reported that drivers who don't comply with the directive from the state are subject to fines and suspension of their vehicle registrations. If passed, the bill, now ticketed for the House, would produce a standard card of insurance identification for each motorist. The standard card could help solve the problem of motorists using counterfeit cards to drive without insurance. For years Texas officials have been looking for a method to solve the problem of drivers operating automobiles without insurance. Reports indicate up to 26 percent of drivers in the state do not drive with insurance, violating a Texas law which requires that they hold at least minimum liability coverage.
AMS TO INTEGRATE IRS-AIMS RATING
AMS Services has entered into an agreement with IRS-AIMS to integrate their MAGIC for Windows Texas rating software with AMS management systems in 2001. The reorganization of the AMS Holding Group during the first quarter paved the way for a new open-door policy on the way AMS Services works with third party rating vendors. IRS-AIMS was the first contract signed. The first integrated product should be ready by late summer. Gary Boyd, president, IRS-AIMS, commented on the new agreement: "We're very excited about the opportunity to integrate with the AMS family of products. It's refreshing that AMS has laid aside the competitive issues and done what's best for agents. We urge the entire industry to follow AMS' lead." Loren Parsons, president, AMS Services, also commented: "Texas has always been unique when it comes to managing their company filings and rates. Because the sole focus of IRS-AIMS rating software is Texas, they handle the exceptions very well. We are pleased to offer this integration to our Texas agents, and we are delighted to be working with an organization that has achieved such a solid reputation in the Lone Star State."
TDI HALTS DAILY WATCH OF INSURER
PacifiCare Health Systems Inc. is no longer under the daily scrutiny of the Texas Department of Insurance after the insurer agreed to a corrective action plan and follow-up conversations. PacifiCare has committed to spending what it takes in the next year, much of it in Texas, to upgrade its claims processing system to increase the pace at which doctors are paid, said Jose Montemayor, state insurance commissioner, in a report by The Dallas Morning News. The agency placed PacifiCare, which insures 200,000 people in North Texas, on administrative oversight in November because of concerns over quality of care, late payments to physicians and adequate access to doctors. "I've heard firsthand the hardship that slow payment works on providers," Montemayor said. "Prompt pay for services rendered makes good business sense, and Texas physicians, providers and consumers deserve nothing less." In early April, the nonprofit All Saints Hospital of Fort Worth sued the insurer for $2.5 million in unpaid claims. Two weeks earlier in a Miami lawsuit, two Texas medical associations representing 37,000 doctors joined a lawsuit that accuses PacifiCare and other major insurers of fraud, racketeering and conspiracy by systematically refusing to pay for medical treatments doctors deemed necessary. PacifiCare has declined to comment on the suits.
HARTFORD'S NEW ENHANCEMENTS
As more small and mid-sized companies expand their use of the Internet as a business tool, they become increasingly vulnerable to risks that may not be covered by their standard business insurance policies. E-mail viruses, website business interruptions and online copyright infringement are among the most common cyber exposures facing businesses today. The Hartford Financial Services Group recently surveyed owners of small and mid-sized businesses and found 80 percent did not know whether their policies covered these types of risks. The Hartford's coverage enhancements, called CyberFlex, are tailored to the needs of small and mid-sized "bricks and clicks" businesses—those that use the Internet but still generate the majority of their revenues through traditional off-line activities. CyberFlex enhancements are now being included in policies for most mid-sized companies in more than 30 states, and are expected to be available in most states by September. CyberFlex enhancements for small businesses will be available for purchase starting this summer, with a countrywide rollout scheduled this fall.
CONSECO TO BUY INDIAN COMPANY
Following a recent decision to reduce its work force by 14 percent through outsourcing its customer service and backroom operations to India, Indianapolis-based Conseco Inc. announced that it would acquire exlService, an Indian company which specializes in providing office services. "Exl was founded in early 1999 by a group that included Gary Wendt, who had recently retired as head of G Capital Corporation," said Conseco's announcement. "He took the reins as Chairman and CEO of Conseco in mid-2000. Wendt and his wife own 20.3 percent of Exl; his relatives own an additional 9.4 percent. Wendt will be prohibited from realizing any value from his shares unless Conseco recovers its $52.6 million acquisition price through cost savings achieved from the venture and/or profits from third party business managed by Exl." If this doesn't happen by the end of his contract with Conseco in 2005, he's agreed to forfeit the shares. Conseco anticipates cutting 2,000 jobs and relocating the affected services to New Delhi over the next 21 months.
