All articles by LII editorial
LII editorial
Reprieve for block exemption rule
In a last-minute decision, the European Council (EC) has lent its qualified support to the continuation of the insurance Block Exemption Regulation (BER) for insurers in the European Union (EU) Expiring on 31 March, the BER, as last renewed in 2003, sets out the conditions under which insurance companies can cooperate in the fields of joint calculations and studies, standard policy conditions, insurance pools and security devices without infringing EU competition law. According to the European federation of insurers and reinsurers, the Comit Europen des Assurances (CEA), under the ECs current proposals cooperation on calculations, tables and studies, possibly with some redrafting, would be permitted while insurance pools would also be permitted, but with significant amendments.
Distributors abandon Phoenix
US life insurer Phoenix Companies troubles continue to mount relentlessly as it faces the prospects of a massive slump in life and annuity sales in 2009 and beyond The 158 year old Hartford, Connecticut-based insurers new sales prospects were dealt a severe blow in early-March when composite insurer State Farm announced that it had suspended distribution of Phoenixs products indefinitely, citing downgrades by rating agencies as its primary reason for doing so. A distributor of Phoenixs products since 2001, State Farm was responsible for a large portion of Phoenixs sales 68 percent of its annuity sales and 27 percent of its life insurance sales in 2008.
SEC’s opponents go on the offensive
Opposition to the US Securities and Exchange Commissions (SEC) Rule 151A under which it will assume regulation of indexed annuity products as securities in January 2011 continues to mount In the latest and potentially the most significant development the National Association of Fixed Annuities (NAFA) has released a draft bill that would nullify Rule 151A clarify and confirm the insurance status of indexed annuities and insurance contracts. The proposed bill is the work of Congressman David Meeks and given sufficient backing will be submitted the House of Representatives.
Reform could spell disaster for US health insurance industry
Proposals to reform US health insurance being considered by President Barack Obama and Congress could have a devastating impact on private health insurers, concludes consultancy The Lewin Group (TLW) At worst TLW estimates that insurers could loose up to two-thirds of their customers to a proposed public health plan. TLWs estimates are subject to a number of assumptions, first being payment levels
Plunging market capitalisations give US life insurers a battering
Mounting investment losses and slumping stock markets are creating a perfect storm for US insurers, as the industrys market capitalisation plummets, and the timing could not be worse Even as insurers find themselves in dire need of access to their own stock to maintain cash, the market capitalisation crunch means they must preserve capital by suspending or dramatically reducing share buyback programs, which turns off shareholders and Wall Street analysts Having survived the initial fiscal crisis ushered in by the AIG disaster, the US life industry now find itself squarely back in the crosshairs, with many analysts alarmed at how little cushion exists for some of the industrys biggest players.
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AXA Asia-Pacific bolsters capital
AXA Asia Pacific Holdings (AXA APH) has successfully completed the first phase of a capital raising exercise targeting a minimum of A$660 million ($455 million) and a potential maximum of A$890 million in new ordinary equity capital AXA APH announced on 18 March that in the first phase of the exercise it had raised A$500 million in a placement of ordinary shares to unnamed new and existing institutional investors including French insurer AXA.
US insurers face a wave of litigation
Fraudulent was one word used by witnesses testifying before a senate committee on the methods used by many US health insurers to reimburse policyholders using out-of-network health service providers Though insurers are acting to curb abuse, it is too late to prevent a wave of class actions against them Medical costs in the US are the leading cause of individual bankruptcy, even though individuals involved usually have health insurance, Linda Lacewell told a Senate Commerce Committee hearing chaired by Senator John D Rockefeller.
Old Mutual takes steps to stem losses in the US
UK-based insurer Old Mutual has taken a decisive step towards eliminating a major problem with the decision to close Old Mutual Bermuda (OMB), the offshore unit of its US life insurance operation, to new business One of our key priorities is strengthening governance and risk management and we have taken the decision to close OMB to new business with this in mind, said Julian Roberts, Old Mutual Group CEO Roberts replaced Jim Sutcliffe as CEO in September 2008.
Pandemic risk looms as large as ever, warns Lloyd’s
A source of major concern and attention until recently, the threat of a flu or other pandemic has been pushed into the background by the global economic crisis But despite no longer being centre stage in the media, risk of a pandemic is real and present, warns Trevor Maynard, emerging risks manager at Lloyds of London In a study, undertaken for the Chartered Insurance Institute (CII), Maynard focuses on the impact of a pandemic and stresses that the insurance industry will be on the front line and must ensure policies are designed to respond should such a situation occur
Germany’s Talanx finds new partner in Swiss Life
Swiss Life, Switzerlands largest life insurer, and Talanx, Germanys third-largest insurer, have formed a strategic partnership aimed at fostering co-operation in a number of areas including distribution, life insurance solutions in international markets and life reinsurance Reinforcing the partnership, Talanx will increase its stake in Swiss Life from 2.9 percent to up to 9.9 percent Talanx will also acquire another 3 percent stake from Swiss Lifes treasury holdings of its own shares and further build its stake by buying Swiss Life shares on the market.