W. VA. BEGINS TAGGING FIRMS

Following up on warnings issued earlier this year, West Virginia officials have begun identifying businesses that are operating without workers' compensation coverage and posting yellow warnings signs on their doors.

Insurance Commission employees tagged 147 businesses in Charleston in the first week of the program, The Associated Press reported. The enforcement effort will be taken statewide.

The signs warn employees who work at the firms and the public that the employer does not have the state-required workers' compensation coverage. "The notice also says the employer is now personally liable for any cost associated with an employee of theirs who is hurt while on the job," said Insurance Commissioner Jane Cline.

Officials estimate that 2,000 of the state's 40,000 businesses do not have workers' compensation policies. An earlier campaign to advertise the names of employers in default resulted in 120 coming forward to pay and another 111 filing paperwork to terminate their businesses or seek an exemption.

WHEN FEMA CHANGES RULES MID-STREAM, WHO SHOULD PAY FOR IT?

FEMA recently issued new flood maps that require people in many parts of New Orleans to elevate their houses, according to Jeff Albright, chief executive officer of the Independent Insurance Agents of Louisiana.

"When you talk of raising a structure up off the ground, its very expensive. I've heard estimates ranging from $25,000 to $60,000. Obviously that is a very difficult situation for policyholders to deal with," he said. Albright asked, "If policyholders are not able to have their houses elevated, will flood insurance be available through the NFIP?"

There are a lot of public policy questions related to the virtue of rebuilding an area that is below sea level and then providing flood insurance to it, Albright said. "A lot of people who are not from [New Orleans] ask the question: Why do people live below sea level? And, why should we rebuild that? And, why should those people get any help?"

According to Albright, people in New Orleans bought property based on the existing FEMA flood maps and assurances from the Army Corps of Engineers that the levees could withstand a Category 3 hurricane. He said people made rational decisions based on the information they had at the time.

However, now FEMA is revising its maps and saying, "'Oops, it needs to be three feet higher.' And, 'Oops, the levees didn't hold. By the way, we don't think its going to hold the next time a Cat 3 storm hits.' And 'We're not sure we're going to enhance the levees to make them what we told you they were to begin with,'" Albright said.

"Whose fault is that? he asked. "Is it the fault of the policyholders that made rational decisions based upon assurances from the federal government, FEMA and the Corps of Engineers? Or is it the fault of the federal government..?"

As always, the question comes down to: who is going to pay for it? "Are we going to make those people in New Orleans suffer enormous financial loss?" asked Albright.

MISS. APPROVES 90% WIND POOL RATE HIKE

Mississippi Insurance Commissioner George Dale has approved a 90 percent rate increase for homeowner policies provided by the Mississippi Windstorm Underwriting Association.

The association, commonly known as the wind pool, had requested a rate increase of almost 400 percent as a result of the devastation caused in August 2005 by Hurricane Katrina. Dale said a rate increase of that size was unacceptable.

"I regret that wind pool policyholders will have to pay any increase in premiums," Dale said. "However, an increase is necessary in order to maintain the stability of the program. Without the wind pool, many residents would be unable to get any wind coverage due to a number of companies choosing not to write the wind on the coast."

The Mississippi Windstorm Underwriting Association provides wind and hail insurance for coastal property owners who could not obtain private insurance. The wind pool is funded by assessing all insurance companies that provide property coverage in the state.

The wind pool currently covers about 16,000 homeowners but officials expect more homeowners to seek out the pool as private insurers continue to pull back from the Gulf Coast.

In an effort to reduce the amount of the increase needed by the wind pool, Gov. Haley Barbour in June set aside $50 million from federal grants funds awarded to the state for hurricane recovery.

CHUBB CHUGS ALONG IN THE 2ND QUARTER

The Chubb Corporation reported that net income in the second quarter of 2006 was $598 million, or $1.41 per share, compared to $495 million, or $1.23 per share, in the second quarter of 2005.

Operating income, which the company defines as net income excluding after- tax realized investment gains and losses, increased to $571 million from $461 million in the second quarter of 2005. Operating income per share increased 18 percent to $1.35 from $1.14.

The second quarter combined loss and expense ratio improved to 85.2 percent in 2006 from 88.3 percent in 2005. Catastrophe losses for the second quarter of 2006 were $80 million, accounting for 2.7 percentage points of the combined ratio. In the second quarter of 2005, catastrophe losses were $21 million and accounted for 0.7 points of the combined ratio. The expense ratio for the second quarter was 28.5 percent in 2006 and 28.0 percent in 2005.

"Chubb had another outstanding quarter," said John D. Finnegan, chairman, president and CEO. "Each of our three major business units contributed substantially to earnings, and the specialty business reached a milestone in its recovery by achieving a combined ratio below 90 percent."

Second quarter net written premiums for insurance business increased 3 percent to $3.0 billion. Premiums for reinsurance assumed business declined 51 percent, reflecting the impact of the Chubb Re Harbor Point transaction completed in Dec. 2005. Total net written premiums declined 1 percent to $3.1 billion.

P/C investment income after taxes for the second quarter increased 10 percent to $288 million in 2006 from $261 million in 2005.

NEARLY 29% OF EMPLOYEES UNPRODUCTIVE

Nearly 29 percent of company time in America is unproductive, according to the results of a new study by management consulting firm, Proudfoot Consulting. The estimated cost of poor productivity in the U.S. is $598 billion and U.S. companies "lose" the equivalent of 33.5 days per worker, per year, the productivity study found.

Barriers to productivity identified by U.S. executives point to management issues, said Luiz Carvalho, CEO of Proudfoot Consulting.

"There appears to be a lack of alignment within executive and managerial ranks, where strategy is not rolled down into actionable steps," Carvalho said. "Because of this disconnect, more than a quarter of the workforce's time in America is still unproductive, costing the U.S. economy billions of dollars."

An overwhelming 50 percent of U.S. executives, significantly more than the global average of executives surveyed, said the number one barrier to productivity was inefficient management planning of work and organization structure. Forty-three percent surveyed also ranked poor leadership in terms of management demonstrating and leading change as the second greatest barrier to productivity. Yet, more than one quarter of executives surveyed have no targets established for improving productivity in 2006.

Proudfoot Consulting's 2006 Productivity Report surveyed top U.S. executives asking them to rank issues related to management as key barriers to productivity in their organizations. More than 800 executives in 19 countries responded. A copy of the report is available at: www. productivitystudy.com