News Briefs

National

Poll Reveals Americans’ Views on Aging: A poll by the MetLife Mature Market Institute conducted by Zogby International shows that 60 percent of Americans believe “old” is age 71 and over, but that 65 percent also wish they were under 40.

“Since the population is aging and there are more people in middle age than ever before, the idea that old begins at 30 is outdated and people are not considered old until much later in life,” said Sandra Timmermann, director of the MetLife Mature Market Institute.

The study indicates that even younger people, those between 18 and 24, have adjusted their idea of old. A majority, 59 percent in that age group, refers to old as someone over 60. Furthermore, though most people over 35 say they wish they were younger and there is a clear desire to be young, there are a significant number of older people, 31 percent of those over 70, who are content with their current age.

“As time goes on, changed attitudes will result in increased numbers of older people who will continue to work, to start their own businesses, or to join with younger generations to help meet community needs. No longer will there be social pressure to ‘hang it up’ at a certain age,” Timmermann predicted.

Americans are now expected to live to age 77. The median age of those in the U.S. is now 35.3, according to the U.S. Census Bureau. There are 36.3 million people 65 and over; this age group accounts for 12 percent of the total.

Transit Bill Targets Safer Highways: Auto safety groups said that a highway and transit bill approved by Congress would help deter drunken driving, encourage states to pass primary seat belt laws and lead to safer vehicles, reported the Associated Press.

The safety provisions, part of a massive $286.4 billion transportation bill, offers an assortment of incentives and new requirements aimed at reducing crashes along the nation’s highways at a time when more than 42,000 people are killed on the road every year.

AP reported that safety groups applauded several safety provisions, including $29 million a year to implement high visibility enforcement efforts to curb drunken driving and grants to states that pass a primary seat belt law, which lets police stop vehicles for seat belt violations, or achieve a belt usage rate of 85 percent.

Under the plan, the government also would be required to issue new rules requiring rollover prevention technology by 2009, an update to the roof strength standard, and improved side-impact crash protection in vehicles by 2008.

The auto industry said many of the safety measures already were found in vehicles, including side air bags and electronic stability control.

Among other items, the bill would push the government to collect non-traffic, non-crash data sought by safety advocates concerned about children getting backed over by vehicles on private property.

All vehicles also will be required by April 2007 to have power window switches that are pulled up or out.

The bill also requires crash test data compiled by the government to be available on all new vehicles by September 2007.

Delaware

Leg Session Difficult, Not Damaging: The 143rd Delaware General Assembly wrapped up its 2005 biennial session with the passage of the budget bill on June 30 and without the passage of legislation that would have negatively impacted insurers according to the Property Casualty Insurers Association of America.

Enacted legislation includes SB 20, which permits the Department of Insurance Fraud Bureau investigators to confiscate the tags of automobiles that have been found to be uninsured. The bill also requires advance notice of the planned confiscation to the vehicle’s owners and an opportunity to prove they have coverage.

Also, HB 192 requires public participation in a final agency agreement passed this year. While this legislation does not directly impact property/casualty insurers, it may make it easier for insurers to add their voice to an agency consent decree where the public is normally left out of the decision-making process.

Another bill, HB 218, would help provide flexibility in establishing captive insurers in Delaware through certain changes in the statutes. This bill will help to make Delaware the ‘first state’ on attracting captive insurers. It has passed the General Assembly and is awaiting the governor’s action.

Georgia

Hurricane Dennis Losses Top $10 Million

As claims reportedly continue to pour in, Georgia Insurance Commissioner John Oxendine said insured losses in Georgia from Hurricane Dennis now exceed $10 million.

“Damage to insured homes, vehicles and businesses is included in this estimate,” Oxendine said. “It’s at least $10 million now and rising.”

The estimate was based on claims reported by various property and casualty insurance companies. Oxendine emphasized that these claims reports are only a partial listing-not all companies have reported.

Oxendine pointed out that while flood damage to vehicles would be included in any reporting of insured losses, extensive damage to structures from flooding, including businesses as well as private dwellings, would not be represented in his estimate.

Flood insurance is offered through a federal program, not through insurance companies.

Michigan

High Court Rejects Medical Monitoring: The Michigan Supreme Court has in a 5-2 decision rejected medical monitoring as a cause of action in a case where the plaintiffs had not alleged present physical injury. The American Tort Reform Association (ATRA) had filed a “friend of the court” brief with the Michigan high court urging it to render this decision.

“This ruling makes clear that in Michigan, merely being exposed to a substance does not give someone the right to sue for medical monitoring,” said ATRA President Sherman Joyce. “Now, the last four state supreme courts to rule on medical monitoring have all rejected it as a cause of action. We applaud the Michigan court’s decision to refrain from legislating from the bench and for recognizing whether a new cause of action should be created for medical monitoring in the absence of any physical injury is a policy question for the legislature, not the courts.”

Other states that have rejected medical monitoring as a cause of action include Kentucky, Nevada and Alabama.

ATRA filed an amici curiae brief in support of the defendant in the case, Henry v. The Dow Chemical Company. Other amici on the brief with ATRA were the Chamber of Commerce of the United States, National Association of Manufacturers, American Chemistry Council, The Coalition for Litigation Justice Inc. and the Property Casualty Insurers Association of America.

Oklahoma

Bill to Protect Against Discount Card Fraud: New legislation in Oklahoma that defines discount medical plans and protects consumers against high-pressure sales tactics and misleading information is welcome, according to Insurance Commissioner Kim Holland.

Companies are selling the discount health cards to Oklahomans seeking affordable health care. Usually for a monthly fee, the cards claim to save subscribers money by offering discounts on physician visits, hospital stays or other medical treatment.

“These programs are sometimes confusing because they are not insurance, although they are often presented to consumers as insurance or as a substitute for insurance,” Holland said.

A recent complaint came to the Oklahoma Department of Insurance from a woman who purchased a “Maternity Card” from a company promising a discount that would cut her hospital expenses in half. The company issuing the card refused to return her money after the hospital denied the card.

“Consumers have fallen into the trap of purchasing this product without realizing there are a limited amount of providers out there who have agreed to the discount, or even know about the program,” Holland added.

SB 729, which goes into effect Nov. 1, 2005, requires discount medical plan organizations to keep an updated Web site of health care providers who have contracted with them to provide the discounts.

Companies must also register and pay an annual fee with the Oklahoma Insurance Department before doing business in Oklahoma. The department will have authority to regulate discount plan providers and stop them from conducting business if they are found to be fraudulent or practice deceptive sales tactics.

Wyoming

Proposal to Catch Uninsured Drivers: A legislative panel is considering new proposals aimed at reducing the number of uninsured motorists in Wyoming.

Vehicle owners in Wyoming are required to have insurance, but some drop it shortly after registering their vehicles, officials say.

Past attempts to require insurance companies to notify the Wyoming Department of Transportation when motorists cancel or default on their liability insurance have drawn objections from both entities as too costly or cumbersome.

But the Joint Wyoming Transportation, Highways and Military Affairs Interim Committee heard two new proposals that might prove more promising.

One proposal, presented by lobbyist Dan Lex for AIG Insurance Co., would involve a random sample of about 10 percent of registered vehicles annually to verify they were insured. Those who were not would have their car licenses removed and their owners could face prosecution, he said.

The second proposal would have police use a Web service to immediately verify whether a motorist is insured.

Jim O’Connor, support services administrator for WYDOT, said the service can tell whether a vehicle is covered by insurance by checking its vehicle identification numbers against insurance company databases.

But Donald Coy, representing State Farm Insurance, said Web services aren’t always accurate because a few VINs may be entered incorrectly by insurance companies, auto licensing clerks and Web service employees.

Joel Schell, Converse County treasurer, said such a Web service could slow down the issuing of license plates.

But David Uchner, representing the American Insurance Association, said the Web service might be the best answer to the uninsured problem. “We’re right on the edge of going on the Web site, and we think now’s the time. This might be a chance for Wyoming to jump out in front,” he said.

International

Court Denies Scheme to Curtail Liabilities: London insurance companies long-tail liabilities to U.S. policyholders that resort to so-called “solvent schemes” to cut off claims and avoid liquidation have been dealt a serious blow.

An English High Court ruling denying such a scheme has raised questions among observers whether future runoffs of this sort will be permitted. In the first rebuke of a solvent scheme, English High Court of Justice, Chancery Division, Companies Court (Justice Lewison) dismissed a petition to approve such a scheme by British Aviation Insurance Company Ltd., which was attempting to settle asbestos and pollution liabilities.

Insurers facing liabilities under decades of occurrence policies have increasingly turned to solvent schemes of arrangement allowed under British law to cut off their future liabilities to policyholders. Insurers have been known to utilize these solvent schemes to shutter funds that no longer accept business but are not bankrupt. It allows them to cap their costs.

Some policyholders who know their amounts can immediately settle all their claims, but those that are not sure how much their future claims will be are forced to estimate them.

The BAIC scheme was opposed by a coalition of BAIC’s U.S. policyholders including Goodrich Corporation, The Goodyear Tire & Rubber Co., Textron Inc., and various subsidiaries. Opposing creditors maintained the court lacked jurisdiction to approve a scheme, which improperly placed creditors with substantially different rights into a single voting class.

They also urged the court not to approve a scheme where there were questions about the voting on the scheme and where the scheme lacked a methodology for estimating future claims that provided a clear basis to treat all creditors equally.

The court declined to sanction the scheme because it said it did not have jurisdiction to do so. The court further said it would not do so even if it had jurisdiction because it deemed the scheme inherently unfair.

According to attorneys, the court’s decision could have substantial consequences. Pending schemes structured similarly to the BAIC scheme may need to be reconfigured or withdrawn. It can also be expected that U.S. policyholders may be more active in opposing similar schemes in the English court.

Insurers See CAFTA as Important Step: Congress took an important step toward opening the world’s insurance markets when it approved the Central American Free Trade Agreement (CAFTA), the American Insurance Association said.

“Costa Rica, one of the nation’s that will participate in CAFTA, has one of the world’s last government-owned insurance monopolies. This agreement will gradually open a private insurance market in that country, doing away with the state-run system,” stated David Snyder, AIA vice president and assistant general counsel.

A high level of regulatory transparency is one of the most important provisions. This includes notice and comment rulemaking-meaning any proposed regulation or rule must be published, time must be allowed for a public comment period, and regulators would have to respond to those comments, Snyder explained.

“CAFTA’s insurance provisions will foster overall economic development, reduce unnecessary loss of life and property, and help provide critical infrastructure such as roads, bridges, libraries and hospitals,” Snyder said.

The Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, are the other nations to sign CAFTA. President Bush is expected to sign the CAFTA legislation.

Topics Carriers USA Auto Legislation Claims Georgia Michigan Property Oklahoma Delaware