E-SIG BILL SIGNED
"And all of you young people will someday look back on this day ... and marvel that it was considered a big deal." So said President Bill Clinton to a group of business and computer science students who watched him electronically sign the e-signature bill into law on June 30. It is expected as he said, to "give fresh momentum to what is already the longest economic expansion in history." The law, which was the first bill to ever be signed into law electronically, will give online contracts the same legal force as paper contracts. It will take effect Oct. 1, though companies began March 1 retaining electronic records such as mortgages and financial securities.
OPL TO BUY RELIANCE RE
Bermuda-based Overseas Partners Ltd. (OPL) has agreed to acquire Reliance Reinsurance Company from Reliance Insurance Co., but will not assume the existing liabilities of either company. The amount paid by OPL hasn't been revealed, but the main asset it has acquired is the staff of 50 professionals located in Philadelphia, who are the current managers and underwriters of Reliance Re. The addition gives OPL a reinsurance management facility in the U.S. which is larger than its current operation in Bermuda, and the authority, subject to regulatory approvals, "to write reinsurance in all 50 states and Washington D.C., as well as insurance in over 40 states," according to the announcement. OPL is well-positioned and well-capitalized with total assets of $5 billion.
CLAIMS, LICENSING BILLS MOVE
The Senate Insurance Committee approved AB 393, the agent licensing bill, and AB 481, the claims bill, at a hearing on June 28. AB 393 would prohibit employees of insurance companies who do not have agent licenses from "effecting contracts of insurance," but fails to define "effecting." The bill was amended to allow those employees to make "clerical changes," and directs the California Department of Insurance (CDI) to define what those changes would be. AB 481 would require the Insurance Commissioner to include restitution to policyholders in every settlement with the CDI where the commissioner has determined that the insurer failed to comply with fair claims settlement practices. The National Association of Independent Insurers (NAII) testified against both bills which are now headed to the Senate floor.
WASH. RULING IS A VICTORY
The Washington State Supreme Court decided unanimously to affirm a lower court's ruling that insurers need not include all possible reasons for denying a claim when determining if they have a duty to defend a policyholder. The Washington case initially involved the business of grafting fruit buds to rootstock to produce different types of fruit trees. When there was damage to the rootstocks, Hayden Farms eventually sued Krause, who stored the rootstock, for breach of contract and negligence. Krause had a liability policy with Mutual of Enumclaw, which declined Krause's request for defense saying no coverage existed due to the exclusions contained in the policy. Krause then settled with Hayden for $500,000 and as part of the settlement, assigned all of his rights against Mutual of Enumclaw to Hayden Farms, which then sued the mutual, claiming bad faith.
RIMS' JUDD PASSES AWAY
Granville E. Judd (known in the industry as Ron Judd) recently passed away. Born in Egbert, Wyo., in 1929, Judd joined the Risk and Insurance Management Society (RIMS) in 1967 and became executive director in 1968. During his tenure from 1967 to 1991, RIMS' corporate membership grew from 1,500 to 4,500, and the number of chapters increased from 38 to 88. At the annual RIMS conference in New Orleans in 1991, Judd received the Goodell Award-the society's highest honor.
XCELERATING INTO EBIZ
Xcelerate Corp., a national eBusiness and wireless Internet solutions company with offices in Atlanta, Dallas and New York, has launched its newest industry practice, which will concentrate on the development, integration and deployment of e-business solutions for the insurance industry. Headquartered in Fort Lauderdale, Xcelerate currently employs more than 325 professionals.
AFG FEELING BLUE
American Financial Group Inc.'s (AFG) second-quarter earnings from insurance businesses will be negatively impacted by certain litigation charges and by lower-than-expected underwriting results in its p/c insurance operations. As a result, second-quarter earnings from insurance businesses are likely to be substantially below the $.65 per share recorded in the 2000 first quarter. The company also expects final determination of the earn-out related to the 1998 sale of its commercial lines business in the second quarter or early in the third quarter of 2000. The agreement provided for an additional payment on retention of business through May 31, 2000.
