SEABRIGHT FILES IPO; PLANS TO WRITE WORKERS' COMP IN CALIFORNIA:
Seattle-based Seabright Insurance Holdings Inc. raised $78.8 million in their initial public offering Jan. 20, with shares priced at the high end of the expected range, Reuters reported. Seabright recently entered the California workers' comp market. Seabright had filed to offer 7.5 million shares in the range of $9 - $11 per share when it announced its terms in early December of 2004. The lead underwriter was Friedman Billings, co-managed by Piper Jaffray and Cochran Caronia, according to Forbes.com. The workers' compensation insurer expects to list on Nasdaq under ticker symbol "SEAB" on Jan. 21. The underwriters have the opportunity to purchase an extra 1.125 million shares to cover over-allotments. Seabright said it will use net proceeds from the IPO to add capital to its insurance company subsidiary, as well as for general corporate purposes.
ACIC FIGHTS HOMEOWNERS REGULATIONS:
The Association of California Insurance Companies is fighting on two fronts against a proposed Dept. of Insurance regulation that would unfairly force many Californians to pay more than they should for homeowners insurance, according to the association. "The regulation, now before the courts and the department, would restrict an insurer's ability to consider a policyholder's past claims loss experience when the insurer makes its underwriting decisions," ACIC President Sam Sorich said. "Not only are the department's efforts financially detrimental for many California homeowners, insurers believe the agency lacks the legal authority to impose this restriction." The Dept. of Insurance proposed the restriction in the form of emergency regulations in mid-2003. ACIC and other insurance groups successfully challenged the emergency regulations in court. The department appealed the lower court decision to the 3rd District Court of Appeal, which is expected to rule by mid-March. Meanwhile, the department conducted a Jan. 20 public hearing in a bid to make the regulation permanent. At the hearing, Jeff Fuller, ACIC's executive vice president and general counsel, urged the department not to implement the regulation, arguing the agency lacks the statutory authority. "This regulation would have a negative impact on the residential property market by imposing an unwarranted restriction on the ability of insurers to manage their exposures," Fuller said. ACIC also noted that legislation similar to the proposed regulation has failed to pass in each of the last two years.
CALIF.'S STATE FUND IMPLEMENTS NEW REFORM MEASURE:
State Compensation Insurance Fund announced the establishment of an enhanced Medical Provider Network that will assure the provision of rapid access to medical treatment for injured workers. The network expands on State Fund's existing medical network which has reduced medical treatment costs for employers and provided medical care to workers. The expanded network combines the resources and skills of Kaiser Permanente, State Fund's Preferred Provider Network and now includes selected member physicians from Blue Cross of California's PPO. This new network is the latest initiative by State Fund to implement landmark reform legislation enacted by the State Legislature and signed into law last year by Governor Schwarzenegger. The reform legislation permitted, but did not require, insurers to create networks composed of doctors specializing in work-related injuries and doctors with expertise in general areas of medicine. Approximately 10,300 health care providers at 10,000 facilities are part of State Fund's MPN. "Our Medical Provider Network enhances our ability to provide injured workers with skilled health care providers, as well as primary and specialized care facilities. It also has the potential to reduce costs and bring further rate relief to California employers," said Connie Raiche, vice president of State Fund. New workers' comp insurance reform requires that employers and workers' comp insurers provide information regarding their medical provider networks to all covered employees. State Fund has developed a brochure to meet this requirement. State Fund will distribute this brochure to policyholders.
COLORADO SENATORS KO CREDIT BAN:
By a 5-2 bipartisan vote, members of the Colorado Senate Business, Labor and Technology Committee rejected a measure that would have banned insurers from using credit history to underwrite and rate automobile and homeowners insurance policies. The action by Colorado lawmakers will set the tone for a renewed debate on the issue in many state legislatures in 2005, according to the president of the Property Casualty Insurers Association of America. PCI has spearheaded efforts in Colorado and across the nation to enact laws that allow insurers to use credit histories. Colorado lawmakers passed such a law in 2004, which authorizes the use of credit histories but requires companies to notify applicants for insurance that credit information will be used for underwriting or rating, and prohibits insurers from denying, canceling or nonrenewing policies solely on the basis of credit information. The law mandates that insurers must provide consumers with reasons for any "adverse action" taken as a result of their credit history and protects consumers from adverse actions based on medical collections, identity theft or the negative credit information of a former spouse. The Colorado House Business Affairs and Labor Committee is scheduled to consider a bill that would ban insurance scoring on Jan. 31. Over the past four years, approximately 20 states have enacted laws similar to Colorado's that allow insurers to use credit histories.
CALIF. COMMISSIONER DELIVERS ARMENIAN GENOCIDE SETTLEMENT CHECKS:
California Insurance Commissioner John Garamendi helped deliver the first checks from a $20 million settlement of a class action lawsuit to resolve insurance claims stemming from the Armenian Genocide nearly 90 years ago. The Commissioner played an instrumental role during the final negotiations leading to the agreement with New York Life Insurance Company. The five organizations receiving checks for $333,333 each were: the Armenian Church of North America Eastern Diocese (New York), Prelacy of the Armenian Apostolic Church Eastern U.S. and Canada (New York), Armenian Apostolic Catholic Exarchate for Armenian Catholics in the U.S. and Canada (New York), Armenian Missionary Association of America Inc. (Paramus, New Jersey) and the Armenian General Benevolent Union (New York). Four other Armenian organizations in California will also receive $333,333 each, including: Armenian Church of North America Western Diocese (Burbank, Calif.), Western Prelacy of the Armenian Apostolic Church (Los Angeles), and Armenian Educational Foundation (Glendale, Calif.). The Armenian Relief Society, United States Chapter of Watertown, Mass. will also receive an equal portion of the proceeds.
IIAB-OC TO HOST EPLI SEMINAR:
Katie Freeman Insurance Services, in association with Shand Morahan & Co., the underwriting manager for Markel American and Evanston Insurance Companies, is sponsoring a three-hour continuing education seminar on Employment Practices Liability insurance for Independent Insurance Agents and Brokers of Orange County members on Thursday, Feb. 17 at the Tustin Banquet Center, 721 W. First Street, Tustin, California. Henry A. Lopez, vice president of marketing for the Shand/Evanston Group, will present the seminar. Participants can expect to learn: legal issues related to EPLI; how EPLI policy provisions respond to violations of employment law; underwriting employment practices exposures; and evaluating the advantages and disadvantages of various EPLI policies. The California Department of Insurance has approved the course for 3 hours of continuing education credits. For more information, please call (714) 921-6441.
SURVEY FINDS RED LIGHT RUNNING AMONG TOP CAUSES OF CRASHES:
A new survey conducted by the Farmers Insurance Group of Companies showed more than 36 percent of motorists admitted to running a red light in the past year--an offense that is the leading cause of crashes in urban areas. According to the Insurance Institute for Highway Safety, red light running crashes cause nearly 1,000 deaths and more than 200,000 injuries each year. Red light running is defined as a motorist deliberately entering an intersection after the signal light has turned red. According to Farmers, the problem is then exacerbated because generally when people go through a red light, they accelerate to move through the intersection faster before the traffic in the other direction begins. This impulse to drive faster through the intersection, where there may be pedestrians, does not allow for a proper reaction time. The Farmers Insurance survey also showed that more men (42.2 percent) than women (30.9 percent) said they had run a red light in the past year. Additionally, nearly half (48.6 percent) of those in the 18-34 age group said they had sped through a stoplight in the past year. Seven of those polled were habitual offenders, claiming to have run more than 20 red lights in the past year. Red light cameras have been shown to reduce the number of drivers running red lights, but cameras are only currently allowed in 16 states. According to the IIHS, each year more than 900 people die and nearly 200,000 are injured in crashes that involve red light running.
