October 27, 2007

No-fault returns

“Today is a great day for the people of Florida because the Florida Legislature stepped in to provide protections for Florida’s drivers. In doing so, they made a good law an even better law by helping reduce opportunities for fraud.”

— Gov. Charlie Crist upon signing legislation that will re-enact Florida’s Motor Vehicle No-Fault Law by Jan.1, 2008. The legislation also reforms the law that sunset on Oct.1 to include measures backers hope will protect consumers and reduce fraud.

Reinsurance sense

“We believe CFO Sink’s proposal makes a great deal of sense. The private reinsurance market has both the capacity and the appetite to accept Florida’s catastrophe risk and is able to spread that risk around the world, rather than concentrating the risk in Florida as is currently the case.”

— Franklin W. Nutter, president of the Reinsurance Association of America, in praising a proposal by Florida Chief Financial Officer Alex Sink to alter the way both the reinsurance levels and pricing of the Cat Fund’s optional coverages are established, giving the management of Florida’s reinsurance fund more flexibility.

Rejecting buyout

“Why don’t they go buy Key West?”

— Libby Garcia, one of the few residents to rebuild in Williford’s neighborhood, rejecting the report that the Army Corps of Engineers is considering buying out as many as 17,000 homes along the Mississippi coast and remaking the land into a vast hurricane-protection zone. The Mississippi Coastal Improvement Program could cost $40 billion.

Insurance volatility

“Insurance, if not managed appropriately, can bring higher risk and lower return than other major industries. Knowing how to price risk adequately and carry appropriate amounts of risk on the books is at the crux of sound decision making for insurance companies.”

— Stephen Mildenhall, executive vice president and chief actuary, Aon Re Services, discussing his firm’s report the found all lines of insurance except personal auto have exhibited greater underwriting volatility than the one-year S&P 500 volatility for five years running.

Emerging torts

“If you do a Google search on benzene, you see a lot of advertising from attorneys nationwide. Benzene is an emerging and sexy toxic tort.”

— Daniel Bodell, partner, Gordon & Rees, to attendees of the Casualty Loss Reserve Seminar, advising actuaries to be on the lookout for emerging mass tort claims related to benzene, lead paint and welding rods, despite the fact that significant legal hurdles in these cases remain.

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