Declarations

Moved Over a Line

“This is going to be a capital event, as well as an earnings event. We’ve moved over a line now. Before we were exhausting the natural catastrophe budget. Now we are probably going to encounter negative underwriting earnings for many in the sector.”

—David Flandro, of reinsurance broker Guy Carpenter, on insurance effects of the tragedy in Japan. Flandro said the cost of the quake to the industry, expected to range up to $35 billion according to AIR Worldwide, will be in addition to some $20 billion in catastrophe claims over the past six months, wiping out its budget for natural disasters.

Bringing Expertise

“As director of the FIO, it will be vitally important for [Michael McRaith] to bring this expertise to bear in helping assure that the U.S. and global insurance regulatory systems are both effective and efficient and support vibrant and competitive private insurance markets.”

—Leigh Ann Pusey, president and CEO of the American Insurance Association, on the appointment of Illinois state insurance regulator McRaith to head the new Federal Insurance Office set up under 2010’s Dodd-Frank Wall Street and financial industry reforms to monitor insurers. The FIO will advise Congress and various federal entities on insurers’ systemic risk exposure.

Significant Success

“We consider this legislative outcome a significant success for the property-casualty insurance industry.”

—Fred Bosse, American Insurance Association (AIA) vice president, Southwest region, said amendments added to insurance-related legislation in Arkansas will prevent unintended expansion of commercial liability insurance coverage in that state. As originally drafted, the bill would have expanded the scope to include a number of additional types of coverage and would have broadened the current definition of “occurrence” well beyond the norm. The bill was subsequently amended to clarify that this law will apply to “commercial general liability policies.” The legislation with AIA’s amendments, HB 1439, was signed into law on March 23, 2011.

Topics Legislation