Ohio Casualty officially joins the Liberty Mutual agency family

With $7.3 billion in premium, Liberty Mutual Agency Markets becomes the largest regional independent agency force

Boston-based insurance giant Liberty Mutual Group is now the largest regional provider of property and casualty insurance distributed through independent agents in the country.

Th insurer finalized its acquisition of Ohio Casualty Corp. on Aug. 24. The company then announced a realignment of its $5.9 billion net premium regional agency company organization to make room for Ohio Casualty and its $1.4 billion in premium.

The transaction was valued at $2.7 billion. Liberty Mutual said it funded the purchase with cash on hand and short-term debt. The value per share was $44.00.

The move strengthened Liberty Mutual's agency presence in Midwestern and Atlantic states, complementing its position in other regions.

"The addition of Ohio Casualty enhances the scale and geographic diversification of our Agency Markets business unit while strengthening the overall Liberty Mutual Group," said Edmund F. Kelly, Liberty Mutual Group chairman, president and chief executive officer, in a statement.

Based on 2006 results compiled by A.M. Best Co., the combined $7.3 billion in net written premium makes Liberty Mutual's Agency Market division the largest regional provider of property and casualty products sold through independent agents in the country.

"We are today a stronger family of regional and specialty companies that remains committed to local decision-making, strong agency relationships and ease of doing business that have made us the company of choice for independent agents; and we add Ohio Casualty's talented and dedicated employees across the country to our already strong team," said Gary Gregg, president of Liberty Mutual Agency Markets, a division that includes eight insurers selling through independent agents and brokers.

The companies in Liberty Mutual Agency Markets have more than 6,800 employees and approximately 6,500 appointed agencies. Ohio Casualty, which has approximately 2,100 employees and operations in 48 states, has approximately 3,400 appointed agencies.

Gregg said there would be some employee layoffs in the future but that the company hoped to retain most of the agents.

Ohio Casualty Corp. is the holding company of The Ohio Casualty Insurance Co. and five property and casualty insurance companies (Ohio Casualty, West American, American Fire and Casualty Co., Ohio Security, Avomark and Ohio Casualty of New Jersey, Inc.).

Gregg said the acquisition has resulted in a realignment of Agency Markets in order to take advantage of Ohio Casualty's strength in Midwest and Atlantic states. Ohio Casualty will retain its name and cover Delaware, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, D.C. and West Virginia.

The overall new line-up of Agency Markets companies is:

America First Insurance: Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas

Indiana Insurance: Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin

Montgomery Insurance: Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee

Ohio Casualty: Delaware, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, Washington, D.C., and West Virginia

Peerless Insurance: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont

The three additional agency companies -- Colorado Casualty (Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming), Golden Eagle (California) and Liberty Northwest (Alaska, Idaho, Montana, Oregon and Washington) will continue to operate in their current territories, Also, the specialty lines operations will be combined into the Specialty Products Group.

The operations of the former Hawkeye-Security Insurance are being split between America First and Indiana Insurance. Hawkeye-Security sold personal lines in Iowa, Kansas, Missouri, and Wisconsin and commercial insurance in Iowa, Kansas, Minnesota, Missouri, Nebraska, and Wisconsin.

Liberty Mutual Agency Markets also includes Wausau Insurance, a national commercial property and casualty insurer; and Summit Holding Southeast, Inc., workers compensation insurer in the Southeast.

Dan Carmichael, president and chief executive of Ohio Casualty, will stay on as an executive consultant to Gregg and will help with implementation of the acquisition.

David Lancaster has been named president and chief executive officer of Indiana Insurance, and Michael Winner has been named president and chief executive officer of Ohio Casualty. John Busby has been named senior vice president and chief operating officer, Specialty Products Group.

What's ahead for Liberty Mutual, Ohio Casualty independent agents?

For agents, the Liberty Mutual Agency Markets acquisition of Ohio Casualty promises to be a matter of addition, not subtraction. For the most part, Ohio Casualty's 3,400 agents will join with and not replace or be replaced by Liberty Mutual's existing 6,500 independent agents, according to Gary Gregg, president of Liberty Mutual Agency Markets. "The idea is not to subtract but add," said Gregg.

This is possible because Ohio Casualty's strength in the Midwest and Atlantic regions largely complements rather than overlaps with the territories where Liberty Mutual Agency Markets regional carriers write. There is "very little overlap" among agencies for the two companies -- less than 15 percent by location, Gregg maintains. "Companies and agencies are always reevaluating their relationships but this is not about cutting, it's about growing," he insisted.

The marriage presents opportunities to "bring more products to more agents," Gregg says. For example, Ohio Casualty is known for its artisan contractors program, which will now be available to more agents across the country.

Growth looks promising in specialty lines including surety. Where Ohio Casualty tended to focus on small contractors and Liberty Mutual focused on larger contractors, now agents will be able to go after both.

The regional companies' managers plan to move quickly to communicate with agencies and start re-licensing procedures. Over the next six to 24 months, the company hopes to complete the transition to common technology system, upon which so many products depend.

The merger strengthens his Agency Markets' national footprint and promises to bring new growth as well. But even this major addition may not be enough. "This doesn't mean we are done with acquisitions," Gregg added.

Attorney Scruggs facing contempt charges over State Farm documents

Prosecutors charged prominent Mississippi attorney Richard F. Scruggs and his law firm with criminal contempt in a Hurricane Katrina insurance dispute.

The prosecutors requested that the court schedule an arraignment in the contempt of court case.

U.S. District Judge William Acker ruled in June that Scruggs "willfully violated" a Dec. 8 preliminary injunction that required him to deliver "all documents" about State Farm Insurance Co. that whistleblowers Cori and Kerri Rigsby secretly copied after Katrina.

Acker's ruling came in a suit by E.A. Renfroe and Co. Inc., a claims adjusting firm that handled State Farm claims and fired the Rigsbys after finding out they had taken internal documents about the claims.

Instead of complying with the December injunction, Acker said Scruggs promptly sent the documents to Mississippi Attorney General Jim Hood's office "for the calculated purpose of ensuring noncompliance with or avoidance" of the injunction.

The Rigsbys, from Ocean Springs, Miss., have admitted copying thousands of pages of records to back up their allegations that State Farm wrongly denied claims after Katrina struck the Gulf Coast in 2005.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fla. yanks teachers' liability plan

Florida's public school teachers are returning to their classrooms this month with one less protection from the state.

Since 2001, Florida has provided all public school educators with professional liability insurance. The legislature decided to discontinue the insurance program because of its high cost. This is the first year teachers will not have coverage.

"Due to the nature of their jobs, educators are constantly at risk of being sued," said Bob Boyd, general counsel of the Professional Educators Network of Florida. "It's important that educators protect their careers, just as they would for their health, homes and vehicles."

The Professional Educators Network of Florida serves as an advocate for educators and is concerned about the lack of information that has been given to educators regarding the cancellation of the insurance program.

Boyd said that over the past decade, the number of lawsuits against schools and teachers has risen dramatically. Students taunt teachers and school officials with the fact that their parents can sue them. Nearly half of teachers report that at one point in their careers they have been accused of unfairly disciplining students.

"Teachers need to be able to focus on educating students, not worrying about lawsuits against them," Boyd said. "I encourage anyone who works in an educational institution, especially those who work directly with children, to find adequate liability coverage."

Report: insurers did not shift wind claims

A preliminary report from the federal government has found no evidence to support allegations that private insurers improperly shifted wind damage claims from Hurricane Katrina onto the federal government's flood insurance program.

At the same time, the Department of Homeland Security says that although its "limited review" did not uncover any evidence, it could not rule out the possibility that such shifting of claims by insurers participating in the Write-Your-Own program occurred.

DHS said it reviewed 98 National Flood Insurance Program claim files in Mississippi and interviewed officials from the Federal Emergency Management Agency, homeowners and insurance experts.

"Our sample revealed no evidence that wind damages were improperly attributed to flooding," DHS reported.

No evidence

After reviewing the 98 flood claims, DHS found only two had clear mention of wind damage involvement in the claim. Overall, the report concluded, "There was no indication that wind damage was attributed to flooding or that flood insurance paid for wind damage."

DHS said it spoke with 20 flood adjusters who did damage investigations and reviewed their files but found nothing improper.

"Most adjusters were not involved in any wind damage assessments and felt they were not under pressure from WYOs to attribute wind damage to flooding," the report states.

'Complicating factors'

June Holmes, interim CEO for the Property Casualty Insurers Association of America (PCI), said insurers hope the report "will put to rest the plethora of misstatements accusing insurers of improperly shifting wind claims to the National Flood Insurance Program (NFIP), and that we can move forward to identify the best solutions to the nation's natural catastrophe crisis.

DHS did, however, note that certain "complicating factors" meant it "could not rule out the possibility" that shifting of claims occurred. Among the "complicating factors" the report cites are difficulty in distinguishing between wind and flood damage, especially when all that is left on a property is slab; policy language that excludes coverage if flooding occurs concurrent with wind or other causes of damage; adjusters working for WYO insurers which it said creates a perception of conflict of interest; and limited oversight of WYO by FEMA.

DHS said it plans to issue a final report but gave no date.

Disputes over coverage for wind versus water damage from the 2005 hurricane season have arisen between policyholders and private property/casualty insurers in the Gulf States. While many of these disputes have been settled, a number are still in court or arbitration.

Previous GAO report

The DHS report follows another one on the subject issued earlier this summer from the U.S. Government Accountability Office. The GAO report suggested there could be a conflict of interest when the private insurer for a damaged property allocates wind and flood losses between itself and the federal program.

Officials for FEMA, which administers the NFIP, told GAO staffers they do not have authority to collect wind damage claims data from WYO insurers, even when the insurer services both the wind and flood policies on the same property.

"As a result, for hurricane-damaged properties, such as those damaged by Hurricanes Katrina and Rita, NFIP does not have all the information it needs to ensure that its claims payments were limited to damage caused by flooding," the GAO found. "Concerns over the processing of these flood claims are heightened when the same insurance company serves as both NFIP's WYO insurer and the property-casualty (wind) insurer for a given property. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating a potential conflict of interest."

GAO also said that the lack of both flood and wind damage data limits the usefulness of FEMA's quality assurance reinspection program for NFIP flood claims. GAO found that the NFIP reinspection program does not incorporate a means for systematically collecting and analyzing both the flood and wind damage data together to reevaluate the extent to which wind and flooding were deemed to have contributed toward damages to the property.

According to FEMA, the NFIP paid nearly $16 billion in flood claims in 2005. Since 1978, the NFIP has paid $31.4 billion for flood insurance claims and related costs.

Overbilling lawsuit

Meanwhile, the Associated Press reported that the U.S. Department of Justice is weighing whether to intervene in a lawsuit that accuses insurers of overbilling the federal government for flood damage from Hurricane Katrina, according to a judge who unsealed the case earlier this month.

Two sisters who worked for E.A. Renfroe & Co., a Birmingham, Ala.-insurance adjusting firm that helped State Farm Insurance Co. adjust claims after Katrina, filed a whistlblower suit in April 2006. High-profile litigator Richard "Dickie" Scruggs filed the suit on behalf of the women, Cori and Kerri Rigsby.

The suit remained under seal to allow the Justice Department to weigh whether to intervene. U.S. Magistrate Judge Robert Walker in Gulfport, Miss., unsealed the case over objections from the DOJ that doing so could undermine its decision-making process. The suit accuses insurance companies of pressuring engineers to falsify reports so storm damage could be blamed on flood water instead of wind, which transferred the costs to the NFIP.

The Rigsbys' suit isn't the only one of its kind. In Louisiana, a group of former adjusters has a suit pending that also accuses insurers of overbilling the NFIP for Katrina.

U.S. Attorney David Dugas decided against intervening in that proceeding.

N.C. gets funds for flood maps

North Carolina will receive a $4 million grant from the Federal Emergency Management Agency for a flood plain mapping project, according to Sen. Elizabeth Dole.

"This funding will help protect North Carolinians and their property by enabling them to evaluate flood risk more accurately," Dole said in a written statement.

The grant will go to the state's Division of Emergency Management for officials to produce flood insurance rate maps for the counties within the New River Basin, according to FEMA. The counties include Alleghany, Ashe and Watauga.

Olympus starts writing Florida homeowners

In its application for certificate of authority filed with the Florida Office of Insurance Regulation, Orlando-based Olympus Insurance Co. disclosed $50 million in start-up capital.

The OIR issued a certificate of authority on May 31, according to spokesman Jonathan Kees, and Olympus said it wrote its first homeowners policy on Aug. 9.

Two-thirds of Olympus's initial capital is funded by Gemini Financial Holdings with the remainder provided in matching funds by the State Board of the Administration of Florida under the Insurance Capital Build-Up Incentive Program.

Olympus will write homeowners multi-peril policies, with plans to incorporate condo coverage by the end of the year.

Residential properties of frame or masonry construction valued between $250,000 and $1 million, younger than 25 years will be the company's primary target risk.

In the time frame stated above, condos valued at $25,000 or more with less than two losses in the last three years will also be eligible for coverage.

In year two, Olympus plans to offer business owner policies. At this time, it does not plan to assume any policies from Citizens Property Insurance Corp.

Barry M. Fox is the company's chairman and CEO, with William Lowry named as president and CFO. The two have 65 years of combined experience in finance, insurance, reinsurance and management.

Florida home insurers, politicians at odds over rate filings

About seven months ago, Gov. Charlie Crist signed legislation he said would lower property insurance premiums.

It hasn't quite turned out that way.

State officials had promised rates would drop about 25 percent on average because the new law allows insurers to get cheaper state-backed reinsurance. The law required insurers to pass on those savings to customers.

But as of early August, the average final rate filing under the new law had been for an increase of just over 30 percent, officials said.

State Farm, the second largest home insurer in the state, proposed to drop rates by about 7 percent on average. But state regulators told the company to try again. Insurance Commissioner Kevin McCarty said the company's decrease should be closer to 11 percent.

No increase has been approved yet and McCarty suggested many may not be. "We fully expect the companies to provide the rate relief anticipated by the Legislature," McCarty said.

Those savings were also anticipated by homeowners -- many of whom say they are yet to see any help. A recent survey found about half those polled expected bigger savings.

McCarty, Crist and other officials say some insurance companies are not doing what they were required to by the law.

Insurers say they must have cash on hand to pay out claims from big storms. They argue they never guaranteed the savings state officials promised and tried to tone down expectations.

"Most insurers made no specific promises," said Sam Miller, a spokesman for the Florida Insurance Council, which represents insurers. "In fact, insurers repeatedly sounded a note of caution about the real world impact of the law on policyholder premiums, so as not to raise unrealistic expectations."

State Farm officials said during legislative debate in January that it would likely file for a decrease of about 7 percent. It recently asked for a 7.1 percent drop. "We promised and we delivered, so there's no game going on here," said Mark Delegal, a lobbyist for the insurer.

Ultimately, insurers say they must charge what they think they would need for claims if Florida has another run like 2004 and 2005 when they paid out nearly $40 billion for hurricane damage.

McCarty accused some companies of using savings from buying cheaper state-backed reinsurance to either pad their shareholders' bottom line or buy additional private reinsurance. That may be illegal, he said.

Crist blamed the insurers and vowed to keep fighting to bring rates down. "I'm going to continue to do everything I can to push this industry into a direction of treating consumers fairly in the state of Florida," Crist said. "And right now, there are exceptions, but right now, they're not treating our citizens fairly. They're too greedy."

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Southern governors hear from insurance execs on coastal coverage

Southern governors and insurance executives met late last month in Biloxi, Miss., about the challenges of keeping insurance coverage in coastal areas that are vulnerable to hurricanes, but they reached no consensus on how to best solve the complex problem.

Louisiana, which took a one-two blow from Hurricanes Katrina and Rita in 2005, is offering millions of dollars of incentives to insurance companies that will agree to start writing policies in the state, Gov. Kathleen Blanco said.

Mississippi, which saw thousands of homes and businesses wiped away in Katrina, is subsidizing its state-sponsored wind pool, an insurer of last resort that has seen its coverage expand exponentially since Katrina because private insurers are unwilling to write in some coastal neighborhoods.

Mississippi Gov. Haley Barbour said a stable insurance market is vital to the economies of all coastal states.

"As you know, if you can't insure it, you can't finance it," Barbour said. "And normally, if you can't finance it, you can't build it."

Brian MacLean, chief operating officer of Travelers insurance company, said that from Texas to Maine, property development is now worth nearly $7 trillion. He'd like to see the federal government regluate homeowners' insurance along the Gulf and Atlantic coastlines. Most regulation is done by states, and MacLean said companies face "inconsistency and unpredictability."

He said customers need to know they can find affordable coverage.

"The insurance carriers must be assured that they can over time earn a reasonable return and we believe this can only be done with a stable regulatory environment," MacLean said.

National plan

The Southern Governors' Association earlier this year endorsed the idea of creating a federal catastrophic disaster reinsurance program, but Congress has not acted on that suggestion.

William R. Berkley, chairman of the board and chief executive officer of W.R. Berkley Corp., said state or local governments need to enact strict building codes, enforce zoning regulations on coastal developments and closely monitor insurance companies to make sure they can meet their financial responsibilities.

He said governments should consider subsidizing coverage for property owners who can't afford it. But, he said: "It's just plain silly to provide subsidies to insure million-dollar-plus houses along the oceans and the bays."

Alabama Gov. Bob Riley sounded frustrated as he said insurance companies have refused to provide coverage in some of the most vulnerable coastal areas of his state.

Riley said he doesn't believe the state should be in the insurance business.

"Now, we've got 50, 60 miles of coast. I can't get insurance," Riley said. "I can't imagine what Texas and Florida are going to have to do. So unless there is some consensus among insurance companies, you're going to force the states and the fed government to come up with a program," Riley told the executives.

Cat modeling pioneer Clark forms consulting firm

Catastrophe modeling pioneer and founder of the firm AIR, Karen Clark, has formed a new firm --Karen Clark & Co. -- to help companies better use catastrophe models.

The Boston firm will offer consulting services, independent reviews of company internal processes, and executive briefings.

Clark developed the first hurricane catastrophe model and in 1987 founded the first catastrophe modeling company, Applied Insurance Research, which became AIR Worldwide Corp. after acquisition by Insurance Services Office in 2002.

"It's become clear the industry needs an independent company with the expertise to inform CEOs and their boards on what they need to know about catastrophe risk and catastrophe models and to help them ensure the integrity of their internal risk assessment and management processes," said Clark. "As rating agencies, regulators and other stakeholders take an increasingly active interest in how companies are assessing and managing risk, independent information and reviews of those processes are becoming much more important."

Credit scoring use still an issue for officials, consumer groups

The recent release in late July of a long-awaited Federal Trade Commission (FTC) study on the use of credit scoring for underwriting and rating purposes did nothing to put to rest the controversy over its use by insurance companies. The study did support insurers' contention that there is a valid connection between how well a person manages finances and how likely it is that they will be involved in an accident. However, instead of putting out the fire, it seeemd to energize some officials and consumer groups.

Consumer groups cry foul play

Consumer groups were quick to express their concerns with the results of the study. The Center for Economic Justice and other consumer groups cried foul play, saying that African American and Hispanic minorities were indeed negatively affected by the use of credit scoring, whether intentionally or not. Birny Birnbaum, executive director for the Center for Economic Justice, said that a study by the Missouri Department of Insurance found that a consumer's race was the factor most predictive of an insurance score. And despite relying on data hand picked by insurers, the recent report by the Federal Trade Commission found that insurance scoring was a proxy for race.

"Insurance scoring represents 21st century redlining and the end of insurance as insurers develop ever more-detailed rating schemes based more on economic status, credit scores, education, occupation, prior liability limits -- than the risk of loss and should be prohibited," Birnbaum said in an opinion piece he wrote for Insurance Journal, Aug. 6, 2007.

But not all consumer advocates agree and some have even mellowed a bit on the issue.

Robert Hunter, who follows the insurance industry for the Consumer Federation of America, says the issue is far from dead. He concedes it's less widely debated today than a few years ago when more than 40 states were debating the issue every year. That's partly because about half of the states have adopted a 2003 model law proposed by the National Conference of Insurance Legislators, or NCOIL.

The model law prohibits companies from "solely" using credit information to set rates. Proponents of stiffer legislation say the model law doesn't do much because insurers prefer to also consider other, non-credit data anyway. The "solely" has taken the sting out for many legislators who had qualms about banning its use completely, according to Hunter.

"I think the NCOIL model really snuffed out a lot of the activity," Hunter said. "It gave the legislators a way to look like they were doing something without offending the insurance companies."

However, some states have added some restrictions. In Washington and most recently Delaware, insurance companies can apply credit models to only new customers.

In 2002, Maryland became the first state to ban insurance scoring for homeowners' premiums. Hawaii doesn't allow scoring for homeowners insurance either, and regulators in California and Massachusetts don't let companies consider credit when setting auto insurance rates.

Win/Win Attitude

Still insurance representatives agree -state battle is less "onerous" than it used to be.

"Over the last three or four years, this issue has kind of calmed down," said Sam Sorich, a vice president with Property Casualty Insurers Association of America, an insurer trade group. "More and more consumers now understand that their credit will be considered. There's a growing acceptance of it. Frankly, most people are helped by the fact an insurance company is using credit."

Some of the FTC report's major conclusions support Sorich and other insurance representatives on the positive aspects of credit scores. Among these findings:

• Insurance scores are effective predictors of risk under automobile policies. They are predictive of the number of claims consumers file and the total cost of those claims. The use of scores is therefore likely to make the price of insurance better match the risk of loss posed by the consumer. Thus, on average, higher-risk consumers will pay higher premiums and lower-risk consumers will pay lower premiums.
• Use of credit-based insurance scores may result in benefits for consumers. For example, scores permit insurance companies to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers for whom they would otherwise not be able to determine an appropriate premium. Scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that may be passed on to consumers in the form of lower premiums.
• Credit-based insurance scores appear to have little effect as a "proxy" for membership in racial and ethnic groups in decisions related to insurance. The relationship between scores and claims risk remains strong when controls for race, ethnicity, and neighborhood income are included in statistical models of risk.

In spite of these conclusions, Congressional leaders want to hear the supporting theories, opinions, and critical remarks for themselves.

A Congressional hearing on the FTC study and the use of credit scores at the state level that was scheduled in July, but was cancelled by U.S. Representative Melvin L. Watt, D-N.C., chairman of the Subcommittee on Oversight and Investigations. No alternative date has been selected to hold the hearing, but it is clear that Rep. Watts will hold the hearing and expects to hear from a wide array of interested parties.

Reports from the Associated Press contributed to this article.

Feds release data on drunken driving fatalities

Texas led the nation with 1,354 drunken driving fatalities in 2006 and was among the states to record the largest increase in such deaths, federal transportation officials said.

The National Highway Traffic Safety Administration released in late August data showing drunken driving deaths increased in 22 states and fell in 26 states in 2006.

The NHTSA reported that in total 17,602 people were killed in the United States in alcohol-related motor vehicle traffic crashes, essentially unchanged fromthe 17,590 alcohol-related fatalities in 2005.

There were 13,470 deaths nationwide in 2006 involving drivers and motorcycle operators with blood alcohol levels of 0.08 or higher, which is the legal limit for adults throughout the country. That number was down slightly from 2005, when 13,582 people died in crashes involving legally drunk drivers.

Texas' 2006 total was an increase of 34 from 2005, putting it even with Arizona and Kansas for the biggest jump. However, Utah, Kansas and Iowa had the largest percentage increases compared with 2005.

"Texas has run a first close and second with California for years," said Susan Bragg, victim services director for the North Texas chapter of Mothers Against Drunk Driving. "It's because traditionally Texas hasn't been known as a strong enforcer of DWI laws. We have a lot of highways. We have a lot of drivers."

Results nationwide

The overall number of deaths involving drivers and motorcycle operators with any amount of alcohol in their blood was 17,602 last year. That was up from 17,590 in 2005, said Heather Ann Hopkins, spokeswoman for the national highway administration.

"The number of people who died on the nation's roads actually fell last year," U.S. Transportation Secretary Mary Peters said at a news conference in Arlington, Va., a Washington suburb. "However the trend did not extend to alcohol-related crashes."

Transportation officials announced the new figures as they unveiled an $11 million nationwide advertising campaign as part of a Labor Day weekend campaign called "Drunk Driving. Over the Limit. Under Arrest."

"This crackdown is very, very, very important because it's the penalties that are imposed when someone chooses to ignore the law that really have the ability to make changes," Peters said.

Florida, Missouri and Pennsylvania had the greatest decreases in numbers of drunken driving deaths last year, while the District of Columbia, Alaska and Delaware had the largest percentage decreases compared with 2005.

The District of Columbia had the smallest actual number of drunken driving deaths with a total of 12.

Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fatal workplace injuries drop slightly in 2006

The Department of Labor's BLS National Census of Fatal Occupational Injuries for 2006 reported that 5,703 people died from on-the-job injuries in 2006 compared with 5,734 in 2005. The rate of fatal work injuries in 2006 was 3.9 per 100,000 workers, down from a rate of 4.0 per 100,000 in 2005, BLS reported.

The overall fatal work injury rate for the U.S. in 2006 was lower than the rate for any year since the fatality census was first conducted in 1992.

Fatal highway incidents remained the number one cause of on-the-job deaths claiming 1,329 lives, accounting for nearly one out of four fatal work injuries. While fatal highway incidents remained the most frequent type of fatal work-related event, the number of highway incidents fell 8 percent in 2006. The number of fatal highway incidents in 2006 was the lowest annual total since 1993.

Falls ranked second, increasing 5 percent in 2006, claiming 809 lives. The 809 fatal falls in 2006 was the third highest total since 1992, when the fatality census began. Fatal falls from roofs increased from 160 fatalities in 2005 to 184 in 2006, a rise of 15 percent.

Being struck by objects ranked third, with 583 fatalities, although the number of workers who were fatally injured from being struck by objects was lower in 2006, after increasing for the last three years. The 583 fatalities resulting from being struck by objects in 2006 represented a 4 percent decline from the 2005 total.

Workplace homicides ranked fourth claiming the lives of 516 workers, with more than 80 percent of those workers being shot. However, the number of workplace homicides in 2006 was a series low and reflected a decline of over 50 percent from the high reported in 1994, the Census reported.

Fatalities involving fires and explosions increased by 26 percent in 2006, rising from 159 in 2005 to 201 in 2006. Fatalities resulting from exposure to harmful substances or environments were also higher in 2006, led by a 12 percent increase in exposure to caustic, noxious, or allergenic substances.

Other key findings

Coal mining industry fatalities more than doubled in 2006, due to the Sago Mine disaster and other multiple-fatality coal mining incidents.

Fatalities among workers under 25 years of age fell 9 percent, and the rate of fatal injury among these workers was down significantly.

The 937 fatal work injuries involving Hispanic or Latino workers in 2006 was a series high, but the overall fatality rate for Hispanic or Latino workers was lower than in 2005.

Fatalities among self-employed workers declined 11 percent and reached a series low in 2006.

Aircraft-related fatalities were up 44 percent, led by a number of multiple-fatality events including the August 2006 Comair crash.

Reducing fatalities

"Business and labor must continue to work together with government to reach the ultimate goal of zero fatalities," said Michael W. Thompson, president of the American Society of Safety Engineers (ASSE). "The BLS report noted that 5,703 people lost their lives on-the-job in 2006. The report indicated the number one activity in the workplace that led to fatalities was again transportation incidents."

In all, 27 states reported higher fatality numbers in 2006, while 23 states and Washington, D.C., recorded lower totals, ASSE reported. Texas had the highest number of worker fatalities with 486 followed by California with 448 and Florida with 355. The 12 states recording an increase in fatalities by 20 percent or more were Alaska, Delaware, Hawaii, Kentucky, Maine, Michigan, Nebraska, New Mexico, North Dakota, Rhode Island, Vermont and West Virginia.

"We applaud those states that continue to see a drop in worker accidents and fatalities, such as Alabama, Iowa, New Hampshire, New Jersey, South Carolina, Wisconsin and Wyoming and the District of Columbia which recorded declines of 20 percent or more," Thompson added.