High-Powered Trial Attorneys Compete for Toyota Litigation

Scores of high-powered U.S. trial lawyers pursuing Toyota in court over the car company's wide-ranging safety recalls gathered Wednesday to compare notes, strategize and jostle for a prime shot at the legal bounty.

The conference at a San Diego hotel came a day before a special panel of U.S. District Court judges meets nearby to hear arguments on the consolidation of hundreds of federal lawsuits against Toyota into a single case, or a handful, for pretrial proceedings.

"Everybody's trying to size everybody else up and divide into teams and see who's going to lead the charge where,'' said Mark Lanier, a Houston trial lawyer whose legal team secured over $300 million from Merck & Co. in litigation over heart attack deaths blamed on the painkiller Vioxx.

He is one of several lawyers, chosen from among their peers in various legal camps, who will seek to persuade the Judicial Panel on Multi-district Litigation to assign the Toyota cases to a federal courthouse they consider most advantageous for them.

Attorneys for Toyota Motor Corp. will make their own presentation to the panel. Like some of the plaintiffs lawyers they face, the automaker is expected to seek an assignment of the cases to Los Angeles, near the headquarters for company's U.S. division.

"If the company is located in a district that could handle the litigation, there's always a presumption that it's going to go to that district, and that's certainly the case here,'' said Timothy Blood, a San Diego attorney focusing on consumer fraud cases.

COMPLEX CASES

At least 19 federal districts around the country, from California to Florida, and even Puerto Rico, are in contention, though the choice may not be decided for a month.

Far more important than geography, however, is "the need for a smart, creative judge who knows how to do this, and preferably one who has done it before,'' said Mitchell Breit, a multi-district litigation expert from New York.

Litigation against Toyota has mounted quickly in the months since it began the biggest recall in its history for repairs to ill-fitting floor mats and sticking gas pedals it blames for instances of sudden, unintended acceleration in its vehicles.

Complaints of runaway vehicles and other safety issues have led to the recall of more than 8.5 million Toyota vehicles worldwide. Unintended acceleration alone has been linked to more than 50 crash deaths in Toyota and Lexus vehicles under investigation over the past decade.

Lawsuits related to deaths and injuries are the most obvious faced by Toyota, most of those in state court.

But more than 80 suits seeking class-action status for consumers fordiminished resale value of recalled vehicles also have been filed, accounting for the bulk of cases in federal court and the lion's share of those likely to be consolidated.

Additional class-action cases have been brought by shareholders accusing Toyota of misleading investors, while automobile insurers and rental car companies also are lining up to join the legal fray. By some estimates, federal court filings of all types already number between 200 and 300.

Organizers of Wednesday's conference presented seminars on subjects ranging from "black box'' data recorders in cars to corporate "damage control'' -- organizers said they suspected some Toyota attorneys were quietly attending -- and the debate between mechanical and electronic theories offered for unintended acceleration.

On the sidelines, some of the roughly 150 attendees engaged in the nuanced maneuvering they hope will position their firms to assume a leading role in the litigation, and with it, a bigger payday.

Lanier, for one, was hardly shy about his ambitions.

"I've got 50 personal injury cases (against Toyota), I've got five death cases. ... Any time I'm invested in a case, I want to have a driving role. I'm not a backseat lawyer.''

(Editing by Dan Whitcomb and Cynthia Osterman)

P/C Insurers Can Handle Chinese Drywall Costs, Says Moody's

Property/casualty insurers are expected to continue to handle costs for defective Chinese drywall claims in the normal course of business, according to a rating analyst with Moody's Investors Service.

Losses from Chinese drywall will probably be covered within insurers earnings, rather than affecting capital, said Moody's Investors Services analyst Enrico Leo in a new report. However, the ultimate cost to insurers won't be known for awhile.

The potential liability for claims will reside with companies that have large geographic concentrations in Florida and/or Louisiana and large market positions in the manufacturer, supplier, contractor, and homeowners and condominium classes of business.

While any claims should be manageable, Leo said that property damage and litigation defense costs could be significant while bodily injury claims are more elusive right now and are dependent on further Consumer Product Safety Commission testing.

In his report, "Chinese Drywall Exposure Manageable for U.S. P&C Insurers," Leo said future studies and court rulings will help to provide a clearer picture of insurers' share of the total cost.

Consumers have reported noxious odors from the drywall, as well as corrosion of metal items inside the home and short-term health problems.

There have been a large number of lawsuits against drywall manufacturers, home builders, product installers, suppliers and distributors, but insurers' payments related to Chinese drywall have been minimal, according to Moody's.

Although it is early in the legal process, commercial insurers could face liability for property damage and potential claims under the products liability portion of the commercial general liability (CGL) policy. In terms ofconstruction- defect liability, Moody's Leo said he believes most insurers have modified their policies in order to address past construction defect claims, thereby reducing exposure to Chinese drywall liability.

Homeowners have filed many claims; however, personal insurers are generally denying coverage based on the standard pollution exclusion in the homeowners' policy.

Some companies have already responded to the emerging issue by placing specific policy exclusions for Chinese drywall, while others have stopped offering coverage to contractors in certain geographic areas.

Leo said there are also companies that have not changed their underwriting guidelines because they believe that their exposures are manageable.

"Until industry and legislative tests and studies are completed, and until courts make some preliminary or precedent rulings, cost- estimate reliability will be limited," the analyst said.

He expects the litigation process to be a long one in which insurers will incur considerable legal expenses to defend their insureds.

There are several cases now in the courts.

In one of these cases, the trustee for the WCI Chinese Drywall Trust has filed suit in January against 14 insurance companies in U.S. District Court, Eastern District of Louisiana. More than 700 homeowners may seek recovery through the trust.

Louisiana Attorney General Buddy Caldwell filed suit in Orleans Parish against German drywall manufacturer Knauf Gips KG entities, other international and domestic manufacturers, distributors, importers of alleged toxic Chinese drywall. Several builders were also named in the lawsuit. Caldwell's lawsuit alleges the state has and will continue to suffer economic loss because of the defendants' toxic Chinese drywall.

Last May, a group of Florida homeowners also sued Knauf, its Chinese plasterboard units and several U.S. home builders.

In Washington, U.S. Sens. Bill Nelson, D. -Fla., and Mary Landrieu, D. -La., have filed legislation for a recall and immediate ban on tainted building products from China.

Florida officials were recently denied federal disaster aid for homeowners whose real estate values have declined due to damage from defective drywall.

Congress Approves Final Healthcare Bill Changes

The U.S. Congress approved a package of final changes to President Barack Obama's landmark healthcare overhaul Thursday, and Obama dared Republicans to try to repeal the new law.

The House put the finishing touches on the overhaul by passing a companion package that would make insurance more affordable, raise taxes on the wealthy and close a gap for prescription drug coverage for seniors.

The Senate approved the package earlier in the day. It now goes to Obama to sign.

The votes concluded a yearlong political struggle that tied up lawmakers, dented Obama's popularity and set the stage for a bitter campaign for control of Congress in November.

"This has been a legislative fight that will be in the record books,'' Democratic Senate leader Harry Reid said.

Obama, launching a public relations blitz to sell the new program, mocked his Republican critics and said their promise to make repeal of the law the centerpiece of the congressional campaign would backfire.

"If they want to have that fight, I welcome that fight,'' Obama said in Iowa City, Iowa, in his first major speech since signing the law Tuesday.

"I don't believe the American people are going to put the insurance industry back in the driver's seat. We've been there already and we're not going back,'' he said.

The overhaul of the $2.5 trillion healthcare system is the most dramatic change in health policy in four decades. It will extend coverage to an estimated 32 million uninsured Americans and bar insurance practices like refusing coverage to those with pre-existing medical conditions.

The final changes approved by Congress Thursday include an expansion of federal subsidies to make insurance more affordable and more state aid for the Medicaid program for the poor.

They also eliminate a controversial Senate deal exempting Nebraska from paying for Medicaid expansion costs, close a gap in prescription drug coverage for seniors and delay a tax on high-cost insurance plans.

The final package also would extend taxes for Medicare, the federal health insurance program for the elderly, to unearned income. It also includes reform of the student loan program.

'STROKE OF A PEN'

Republicans have fought the measure as a costly government takeover of healthcare that would restrict patient choice and drive up insurance premiums.

"This has been a somber week for the American people. With the stroke of a pen, President Obama signed away another share of Americans' freedom,'' Republican House leader John Boehner said.

But Obama said he would be happy to engage Republicans in a debate over repeal of the law.

"I say go for it,'' Obama said, goading his critics. "If these congressmen in Washington want to come here to Iowa and tell small business owners that they plan to take away their tax credits and essentially raise their taxes, be my guest.''

The House approved the overhaul and the companion package of changes Sunday after a contentious debate, but had to approve the changes again after the Senate parliamentarian ordered two minor provisions on the student loan revamp be removed. The House vote was 220-207.

The parliamentarian ruled the provisions did not meet reconciliation rules requiring they have a budgetary impact.

The Senate's 56-43 vote on the changes came after Democrats killed about 40 Republican amendments designed to derail the bill or force Democrats into tough political votes before the elections.

As the end of the healthcare debate neared, the Morgan Stanley Healthcare Payor index of health insurers rose 0.4 percent, slightly higher than the broader market. Big insurers UnitedHealth Group rose 0.4 percent, while Aetna increased 0.4 percent.

A second major U.S. manufacturer said the overhaul would cause a huge rise in after-tax costs. Farm equipment maker Deere & Co. said it expected healthcare costs to rise by $150 million this year.

Equipment maker Caterpillar last week estimated the reform would raise its costs by more than $100 million.

White House spokesman Robert Gibbs said the first-year increase occurred because the healthcare law closed an accounting loophole.

"Our bill simply closes the loophole that allows them to deduct that money one time by not counting it as income,'' he told reporters on Air Force One.

(Additional reporting by Andy Sullivan, Patricia Zengerle, Thomas Ferraro; Editing by David Alexander and Peter Cooney)

Copyright 2010 Reuters. Click for Restrictions.

Fees from AIG Asset Sales Enrich Wall Street Banks

The crumbling empire of American International Group Inc. is helping to pave Wall Street with gold.

Auctions of the bailed-out insurer's assets have generated more than half a billion dollars in fees since its near-collapse in September 2008, with every major Wall Street bank getting a piece of the action, estimates from Freeman Consulting show.

The largest sale assignments came to fruition this quarter, when, in a space of just a week, AIG struck deals to sell two major foreign life insurance businesses, one each to Prudential Plc and MetLife Inc., for some $51 billion.

Those two sales have also played a significant role in shaping the first quarter rankings of deal advisers, helping some investment banks make quantum leaps in the coveted league tables, Thomson Reuters data through March 25 shows.

Blackstone Group LP, which has advised AIG throughout the crisis, jumped to No. 9 in the worldwide rankings from No. 78 over the same period last year. Lazard Ltd, which advised Prudential, jumped to No. 5 from No. 11.

AIG, which has been selling assets to repay the U.S. government after a $182.3 billion taxpayer funded rescue, has been involved in as many as 90 transactions with disclosed value of $67.7 billion, the data shows. Together, these deals will generate an estimated $567.2 million in advisory fees, according to Freeman.

But AIG is only one piece of the global financial crisis that has driven financial institution deals in the last two years. The aftermath of the crisis is likely to play a role in keeping investment bankers busy in the coming months as well.

"Ongoing restructurings, access to growth markets and consolidation -- and they are all interlinked in a way -- but those three things are going to drive the business pretty strongly in the next few years,'' said Vikram Gandhi, head of Credit Suisse's global financial institutions group.

Credit Suisse Group AG, which advised both the buyers, rose to No. 2 from No. 6.

The bank started bulking up its financial institutions practice before the crisis and has focused on improving global co-ordination, which has paid off as many of the deals created by the crisis have been cross-border transactions.

"To a large extent this is a return on that investment,'' said Gandhi, who moved to Hong Kong from New York in the summer of 2008.

NEGOTIATING LEVERAGE

Although the two AIG deals have given advisers a good start to 2010, they took many months of work.

Indeed for scores of advisers and government officials working on stabilizing AIG and selling its assets, taking time out -- even for events such as births, weddings and funerals -- has often been difficult.

The fees are well-earned. Morgan Stanley, which is estimated to get the lion's share with $131.9 million, has been the Federal Reserve Bank of New York's consigliere.

Morgan Stanley and Blackstone helped devise the strategy that allowed AIG to regain control of auctions that had devolved into fire sales in the months after the bailout.

So when Prudential, which had offered $11 billion for American International Assurance (AIA) in early 2009, came back with a bid closer to $30 billion in January this year, AIG could ask for more, according to sources close to the situation.

AIG was already well on its way to do an initial public offering for AIA, which gave Chief Executive Robert Benmosche and the special committee of the board, led by Suzanne Nora Johnson, the leverage they needed to push Prudential to raise its bid, these sources said.

It did, to $35.5 billion.

The groundwork also gave leverage to Morris Offit, the AIG director leading the committee negotiating with MetLife, these sources said, declining to be named because the deals have not yet closed.

MetLife, which had come in with about $11 billion early last year, agreed to pay $15.5 billion.

The deals are rewarding in other ways, too.

"These are two huge deals that are going to resolve one of the biggest crises we have had,'' one of the sources said.

(Reporting by Paritosh Bansal; editing by Andre Grenon)

Zurich Targets Emerging Public Companies With Management Liability

Zurich's Specialties' Management Solutions Group has created a new practice aimed at offering management liability insurance to public emerging growth companies with revenues under $500 million. The new practice, called Public Markets Group, will offer directors and officers (D&O), employment practices liability, fiduciary and crime insurance coverages.

For this market segment, Zurich will offer the public markets endorsement for use in conjunction with the D&O select primary form, according to Beth Goldberg, head of the Public Markets Group for Zurich North America Commercial.

Policy enhancements include:

• Definition of executive officer limited to a company's chief executive officer, chief financial officer and in-house general counsel
• Employed lawyers coverage extension
• Fully non-rescindable policy
• Increased automatic coverage (up to 35 percent) for newly acquired organizations
• Notice of claim limited to general counsel, risk manager or their functional equivalent
• Alternate dispute resolution requirement deleted
• Disclosure management coverage sublimit

The Public Markets Group will have offices in New York (serving the East Coast), Chicago (serving the Midwest) and San Francisco (serving the West Coast).

Source: Zurich

Ex-New York City Crane Inspector Admits Taking Bribes

The city's former chief crane inspector admitted taking more than $10,000 in payoffs to fake inspection and crane operator licensing exam results, selling out a 26-year career bit by bit over nearly a decade.

James Delayo showed no emotion Tuesday as he pleaded guilty to receiving bribes and read a short statement in court acknowledging his crimes in a case that helped raise questions about the city's oversight of construction and spurred changes designed to keep a tighter rein on cranes.

Delayo was arrested days after the second of two huge cranes collapsed, killing nine people, in 2008. The charges against him weren't tied to the collapses, but authorities portrayed the case as one in a series to go after builders and inspectors accused of shortchanging safety for profit.

"He sold out and compromised public safety for tainted cash,'' city Department of Investigation Commissioner Rose Gill Hearn said in a statement.

Delayo's plea deal calls for a sentence of two to six years in prison. He's free on bail until his sentencing, set for May 4.

His lawyer, David Oddo, said outside court Delayo "is devastated by what has happened. ... He feels that he's let a lot of people down.''

Delayo, 61, started working for the city Department of Buildings in 1982, rising to become its acting head of crane inspections in 2008. He retired later that year.

He also worked part time as a crane inspector on the World Trade Center cleanup from Sept. 12, 2001, until May 2002, according to federal court papers he filed in a lawsuit against private companies that apparently employed him. The outcome of the suit, which said he was sickened by toxic air and dust, wasn't immediately clear Tuesday evening from electronic court records.

But meanwhile, he also took bribes from 2000 to 2008 to file phony paperwork indicating a Long Island-based crane company had passed inspections that hadn't been done and to say an employee had passed a licensing exam the worker hadn't even taken, among other favors he admitted.

Prosecutors have said Delayo's individual payoffs ranged from $200 to $3,000.

Oddo said Delayo sometimes gave the cranes in question a quick look, if not a full inspection, and felt they were safe. But Manhattan District Attorney Cyrus R. Vance Jr. said Delayo's "willful disregard for the safety of this equipment and the skill of crane operators endangered the lives of Manhattan's residents, visitors and construction workers.''

An official and a worker with the crane company, Copiague, N.Y.-based Nu-Way Crane Service, have pleaded not guilty to bribery and record tampering. The official, Michael Sackaris, 50, and worker Michael Pascalli, 25, are due back in court April 9.

City buildings officials note that they have added crane inspectors, increased training requirements and changed the licensing exam procedure for some crane operators since the 2008 collapses. In a change prompted by the Delayo case, licensing exams for operators of some types of cranes are now administered by a national group, buildings spokesman Tony Sclafani noted Tuesday.

Meanwhile, a crane rigging contractor has been charged with manslaughter in one of the collapses; a crane owner and a former mechanic face manslaughter charges in the other. Besides Delayo, another former crane inspector faces charges including tampering with public records after being accused of lying about examining one of the fallen cranes 11 days before it collapsed.

All have pleaded not guilty.

Maine Superintendent Kofman Reappointed

Maine Insurance Superintendent Mila Kofman has been reappointed by the state Senate.

Kofman has served as superintendent since 2008, and was nominated for reappointment by Gov. John E. Baldacci earlier this month.

Prior to her appointment as superintendent, Kofman was an associate research professor and project director at the Georgetown University Health Policy Institute. She studied state private health insurance market reforms, regulation, products and financing strategies.Earlier in her career, Kofman was a federal regulator at the U.S. Department of Labor.

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Source: Maine Insurance Department

North Carolina Court: Commissioner Rules Until Successor Sworn In

In a case over an Industrial Commission's workers' compensation award, the North Carolina Supreme Court ruled recently that appointed government officials retain their jobs until their successors are sworn in.

The high court overruled an appeals court, which had vacated the February 2007 decision to give Robert Baxter total disability benefits. The Industrial Commission had voted 3-2 to grant Baxter's claim.

The appeals court had agreed with the self-insured company, Danny Nicholson, Inc., that the decision granting benefits should be voided because the 3-2 vote of the Industrial Commission included a vote in favor by one member, Thomas Bolch, whose replacement had been recently announced by then-Gov. Mike Easley. His replacement had not yet been sworn in.

The trucking firm argued that the workers' compensation award was void as a matter of law because Bolch no longer held his office, and the panel thus comprised only two members, who split their votes.

However, the Supreme Court, in a decision in which all seven justices joined, concluded otherwise. In the opinion by Justice Robin Hudson, the court said that the workers' compensation decision was valid because "the authority of an appointed officer continues until the date on which his successor takes the oath of the office in question and thereby becomes duly qualified to begin performing the duties of that office."

The court said its decision conforms with the state's long-standing public policy against vacancies in both elected and appointed offices.

"We decline to approve an interpretation that would result in a vacancy and cessation of the work of an appointed officer immediately upon the announcement of a successor. Voiding actions taken by a holdover official during the time between the announcement of a successor and that successor's swearing-in could promote disruption and delay completion of important work already performed on the State's behalf," the decision says.

The Industrial Commission signed its opinion on Baxter on Feb. 2, 2007. On that same date, Gov. Easley sent a letter to Bolch informing him that his service was at an end and that his successor, Danny Lee McDonald, had been appointed. Easley sent another letter, also dated Feb. 2, to McDonald, notifying him that his appointment was "effective immediately." However, McDonald did not take the oath of office until Feb. 9.

The court noted that, according to an affidavit from a member of the Governor's staff, Bolch was authorized to hold over in his position until the date of the swearing in of McDonald and one of the reasons given was so that the Industrial Commission would have time to issue and file any decisions, such as the Baxter case, which had already been heard on oral argument by panels involving Bolch but which had not been yet issued in a formal written opinion.

Morse to Serve as PIA of Ohio Director of Membership

Terry S. Morse, of Westerville, Ohio, was recently hired by the Professional Insurance Agents Association of Ohio Inc. (PIA) to serve as director of Membership Services/Sales.

Morse oversees membership recruitment and promotion of PIA's member benefits program. He will work with all PIA departments to coordinate member outreach efforts as well as manage membership retention.

Prior to coming to PIA, Morse served as national sales manager for Gibson Guitar Corporation, where he managed and directed the North American operations of sales, marketing and product distribution. Morse is skilled in such areas as brand marketing, product development, strategic planning and developing sales strategies.

Professional Insurance Agents Association of Ohio was founded in 1933 and remains the state's largest organization representing independent insurance agents.Morse's past experience also includes working as director of sales and marketing for National Federation of Independent Business (NFIB) and senior vice president of partnership sales and strategic development at Cendant Corporation

Source: PIA of Ohio

Wisconsin-based Capitol Insurance Reports Strong 2009 Results

Capitol Insurance Companies (Capitol), a Middleton, Wis.-based national provider of specialty property-casualty insurance and commercial surety products, reported a strong year of underwriting profitability for the year ended Dec. 31, 2009.

Capitol posted a combined ratio of 93.9 percent based on gross written premium of $172 million, which produced a $10.1 million underwriting profit. The company has posted underwriting results with a five-year average combined ratio of 91.0 percent and maintains a strong financial position despite the unprecedented economic operating challenges faced last year.

In 2009, the property and casualty operation launched a commercial automobile insurance product. The product is available in 22 states for appointed insurance agents and brokers through a newly designed online processing system.

In addition to commercial automobile, Capitol also expanded its workers compensation insurance product into a number of new states. This product is now available in 17 states for designated insurance agents and brokers.

The Company's fidelity and surety operation continued to expand its new online surety system, Capitol Express (CapEx), so that agents and brokers have the ability to obtain bonds online, anytime. CapEx now offers a variety of bond types in a number of states with additional state and bond expansions planned for 2010.

In November, Capitol acquired Specialty Global Insurance (Specialty Global), an underwriting and claim management operation for miscellaneous professional liability insurance.

Founded in 1959, Capitol is a national underwriter of specialty insurance products in niche areas of the commercial property and casualty and the fidelity and surety markets. Through its operating entities, Capitol Indemnity Corporation, Capitol Specialty Insurance Corporation and Platte River Insurance Company, Capitol offers high-quality customer service in programs tailored to the needs of its customers' business and risk management strategies.

Source: Capitol Insurance Companies, http://www.capitol.net.

Minnesota Scores "A+" on Workers' Comp Report Card

Minnesota ranks the best in the nation in terms of workers' compensation performance, according to the Encinitas, Calif.-based Work Loss Data Institute (WLDI), which recently released its 2010 State Report Cards for Workers' Compensation.

Using eight years of data from Occupational Safety and Health Administration (OSHA) Forms 300 and 200, which cover all OSHA recordable injuries and illnesses, WLDI said Minnesota performed the best of all the states for 2007. Nevada and Arizona came in a close second and third. All three states received a grade of "A+" based on an average of their 2007 scores.

Puerto Rico came in last, then Rhode Island, with New York and New Jersey very close to the bottom.

For the report, states were evaluated based on: incidence rates, cases missing work, median disability durations, delayed recovery rate; and key condition: Low Back Strain. According to WLDI, the report cards help employers, insurers, third-party administrators, state governments and consultants answer the questions, "Who is doing well and why?"A summary of each grade for all states is available atwww.worklossdata.com/SRC2010grades.htm

WLDI also ranked states using a tier system. The Tier I states are Arizona, Iowa, Minnesota and Utah. Tier I means that the state had an average grade of "B+" or better, and a trend going up or level. Those four states were doing great and continuing to improve.

Five states fell into the opposite category – Tier VI – which means they had an average grade of "D-" or worse, and a trend going down or level. The worst performers for the years 2000-2007 were: Illinois, Kentucky, Oklahoma, New York and Wyoming. A summary of Tier Rankings for all states is shown on a U.S. Map Showing Grades by State, at www.worklossdata.com/SRC2010tiers.htm.

Work Loss Data Institute is an independent database development company focused on workplace health and productivity. To view the state rankings and for more information, visit www.worklossdata.

South Dakota: Insured Drivers Covered Even If Struck When Pedestrians

South Dakota Division of Insurance Director Merle Scheiber is warning property/casualty insurers that auto policy forms that restrict the types of motor vehicles for which coverage may apply when an insured is struck as a pedestrian are invalid.

Under SDCL 58-23-8, the law explicitly provides coverage "through being struck by a motor vehicle while a pedestrian," the Department said. The term motor vehicle is broadly defined in law (SDCL 32-35-1) as "every vehicle which is self- propelled and every vehicle which is propelled by electric power obtained from overhead trolley wires, but not operated upon rails." Therefore any restriction relative to the type of motor vehicle other than contained in that definition as it relates to being struck as a pedestrian is impermissible, the Department said.

Claims must be adjudicated in compliance with the statute and must be processed in accordance with the medical payments statute regardless of when the date of loss occurred. However, insurers are not required to review any claims that occurred more than five years prior to March 25, 2010.

Insurers with policy language that does not conform to the law must make a policy form filing that is in compliance, the Department said.

Floods Recede in Fargo, But Other Hazards Linger

As the Red River slowly started to recede this week and fears of major flooding diminished, Fargo residents were left to deal with another problem: environmental hazards that linger long after the waters decline.

Floodwaters can be noxious brews of pesticides, sewage, garbage and animal carcasses that foul drinking water, spread disease and damage fish habitat. Although the Red River didn't do nearly as much damage this year as during record-breaking floods in 2009, authorities say danger could persist.

"Fuels, chemicals, all kinds of things find their way into the water system and it's a huge environmental risk," said Keith Berndt, engineer for Cass County, which includes Fargo and West Fargo.

The 70,000 tons of moist sand had been packed into bags that were stacked along the Red River a year ago, when flooding damaged hundreds of homes, forced thousands to evacuate and caused $100 million in damage. Soaked by contaminated water, the sand is usable only for limited purposes such as road and building construction.Towering mounds of sand on the outskirts of Fargo are a vivid symbol of those hazards.

Those piles soon will get even bigger, as the 1.5 million sandbags used to hold this month's floodwaters are removed and emptied. Residents who ask for a truckload to use around the house are refused.

"We don't want people to use it in their kids' sand boxes or anywhere else they could come in direct contact with it," said Myron Bergland, environmental health manager for Fargo-Cass Public Health.

The Red crested Sunday at just under 19 feet over flood stage -- 4 feet lower than last year -- without doing serious damage to homes and other buildings. Only some baseball fields, farmland and backyards were submerged.

Fargo Mayor Dennis Walaker said he would pop the champagne later this week to celebrate his city's success in fighting the flood. He noted that while most floods have at least "one day of chaos," that didn't happen this year.

"The big thing is relief," he said Sunday. But he added, "We need at least another week here before we get it to the level we wanted it to be."

Last year's disaster swept pollutants into the Red and its tributaries, although the sheer volume of water and accelerated flow rate weakened the effect, said David Glatt, environmental chief for the North Dakota Department of Health. Even as officials were ready to declare victory in this year's flood fight, Glatt emphasized the importance of safeguarding drinking water supplies, particularly in rural areas where private wells may have been submerged.

No large-scale water-quality testing was conducted in 2009, but officials monitored hospital emergency rooms and found no upswing in visits that would have indicated an outbreak of flood-related sickness, Glatt said. Officials credited experience and public education with preventing serious environmental health problems.

"We've had a little familiarity with floods in recent history," Glatt said. "People have had an opportunity to prepare and minimize the harm."

Cities in the region have reduced their exposure to contaminated water over the years by elevating wellheads or surrounding them with dikes to keep floodwaters out. But numerous wastewater treatment systems were overwhelmed during last year's flooding, forcing officials to dump raw sewage into the rivers. A few have requested permission to do likewise this year if necessary.

Private well users are particularly vulnerable. State and local agencies have provided information about protecting residential wells and stand ready to help disinfect contaminated ones. Fargo-Cass Public Health last week warned owners of submerged wells not to use the water for drinking or cooking until it can be tested. Agencies also urged people to secure household and farm chemicals, fuel tanks and other potential sources of pollution.

Dead livestock is a particular threat in Great Plains ranch country. Some 90,000 head of cattle were lost during last year's calamity. They're a potential source of pathogens that can pollute wells and surface waters.

"Even a typically normal, healthy cow has E. coli bacteria in its gut," Bergland said. "You need to properly dispose of the bodies before they drift away in the water."

State agencies, including the North Dakota National Guard, helped retrieve bloated carcasses and advised ranchers how to deal with them. It's not as simple as it sounds. If buried, the bodies must be placed above the water table under at least 4 feet of loamy, clay soils. If burned, only organic fuels such as wood can be used and a state permit is required.

Gov. John Hoeven said there have been few if any flood-related livestock deaths so far this year, though more flooding may be in store farther west of the Red River Valley, where most of the state's ranches are located.

Once immediate flood dangers have passed, ecological aftereffects can persist for months or years.

Phosphorus fertilizers that wash into rivers and lakes can stimulate growth of algae blooms that reduce oxygen levels and kill fish. Heavy soil erosion along riverbanks degrades fish habitat and spawning areas, particularly in streams that feed larger rivers such as the Red.

"Think of trying to breathe in a dust storm," said Henry Van Offelen, a scientist with the Minnesota Center for Environmental Advocacy. "That's what a big sediment plume in water is for fish."

But the environmental setbacks are not always a total loss. Some of the leftover bag sand can be used in landfills to prevent liquid pollution from seeping into groundwater. If clean enough, the sand can be mixed with salt and spread on icy roads. And the county has sold about 20,000 tons to contractors for fill at building construction sites and for road resurfacing. Price: $3 a ton.

"We're not making of lot of money, but we're recouping a little of the cost of the flood," Berndt said.

Wisconsin-based Capitol Insurance Reports Strong 2009 Results

Capitol Insurance Companies (Capitol), a Middleton, Wis.-based national provider of specialty property-casualty insurance and commercial surety products, reported a strong year of underwriting profitability for the year ended Dec. 31, 2009.

Capitol posted a combined ratio of 93.9 percent based on gross written premium of $172 million, which produced a $10.1 million underwriting profit. The company has posted underwriting results with a five-year average combined ratio of 91.0 percent and maintains a strong financial position despite the unprecedented economic operating challenges faced last year.

In 2009, the property and casualty operation launched a commercial automobile insurance product. The product is available in 22 states for appointed insurance agents and brokers through a newly designed online processing system.

In addition to commercial automobile, Capitol also expanded its workers compensation insurance product into a number of new states. This product is now available in 17 states for designated insurance agents and brokers.

The Company's fidelity and surety operation continued to expand its new online surety system, Capitol Express (CapEx), so that agents and brokers have the ability to obtain bonds online, anytime. CapEx now offers a variety of bond types in a number of states with additional state and bond expansions planned for 2010.

In November, Capitol acquired Specialty Global Insurance (Specialty Global), an underwriting and claim management operation for miscellaneous professional liability insurance.

Founded in 1959, Capitol is a national underwriter of specialty insurance products in niche areas of the commercial property and casualty and the fidelity and surety markets. Through its operating entities, Capitol Indemnity Corporation, Capitol Specialty Insurance Corporation and Platte River Insurance Company, Capitol offers high-quality customer service in programs tailored to the needs of its customers' business and risk management strategies.

Source: Capitol Insurance Companies, http://www.capitol.net.

Weisz Named Acting Chair of Illinois Work Comp Commission

Illinois Gov. Pat Quinn has appointed workers' compensation attorney Mitchel R. Weisz as acting chairman of the Illinois Workers' Compensation Commission.

Amy Masters, who has been heading the organization since the retirement of Paul Rink in late February, will return to her previous position of Secretary of Commission / Operations Manager.

Rink had been with the IWCC since 1991.

In a statement released by the IWCC, Weisz said he hopes to lead the organization in evaluating "ideas generated from both within the Commission and outside sources to progressively improve our implementation of the Workers' Compensation Act."

Study: Road Woes Cost North Carolina Drivers $1,350 a Year

North Carolina's big-city motorists are losing nearly on average the cost of a tank of gas every week to pay for their troubles from pot holes, longer waits in traffic and perilous roads.

A national transportation group released a report this week estimating a driver in North Carolina's two largest urban areas loses $1,350 a year because of lost time and gasoline costs sitting in traffic, car repairs and accidents where roadway design likely contributed to a wreck.

The study by the Washington-based nonprofit group TRIP, based largely on federal highway and traffic safety data, may reinvigorate the discussion state transportation boosters want to persuade the Legislature to approve new ways to raise road construction funds.

The state estimated years ago it had a $65 billion funding gap through 2030 between projected transportation needs and the current funding sources to pay for them.

"North Carolina is falling behind in maintaining its major roads, bridges and highways and the state lacks adequate funding with numerous projects that would greatly enhance economic development in the state,'' TRIP executive director Will Wilkins said.

The $838 million in federal stimulus money for ready-to-build roads and bridges only provides short-term assistance for North Carolina, where population is expected to grow by one-third to 12 million and vehicle travel by 45 percent by 2030.

"The bottom line is our needs are growing in North Carolina. Our revenue stream is not,'' state Transportation Secretary Gene Conti said at a Raleigh news conference where he agreed with the findings. "We need to continue to work hard and do more with less, but I don't think at the end of the day that's going to get the job done.''

The group TRIP said the costs above and beyond normal driving and maintenance for Charlotte drivers ($1,351 a year) and Raleigh-Durham ($1,350) area drivers are essentially the same, while drivers in Greensboro and Winston-Salem on average face $901 in expenses because there's less congestion in the Triad.

Statewide, congested and deteriorating roads and those that lack improved safety features cost drivers $5.7 billion, according to the TRIP report. North Carolina has the second largest state-maintained highway system but ranks fourth-lowest in the nation for per-mile capital spending on those roads.

There are more than six million drivers in North Carolina. Wilkins discouraged calculating a statewide driver average because congestion figures were available only in the three metro areas.

Charlotte-area motorists spend 40 hours a year in traffic, compared to 25 hours in 1997. The average rush-hour trip is now 25 percent longer in Charlotte and 17 percent longer in the Raleigh-Durham area compared to a non-rush hour trip, the report said.

The calculation of the three regions is based on the per-driver cost for congestion, additional vehicle costs for driving on poor or mediocre roads and the economic costs of accidents.

A state blue-ribbon transportation commission recommended in 2008 raising the tax on car sales, raising vehicle registration fees and even charging motorists for every mile recorded on a vehicle's odometer as a way to make up for a state gasoline tax eroding as people drive less and with more fuel-efficient cars.

Lawmakers approved last year the commission's idea to expand to all 100 counties the option to raise local sales taxes for public transportation projects, but otherwise the "Legislature hasn't really had the courage to enact many of these suggestions,'' said Tom Crosby with the AAA Carolinas Motor Club.

Wilkins urged Congress to reauthorize the law setting out federal transportation funding to provide more road-funding stability, since federal revenues pay for about one-fourth of North Carolina's road projects.

Georgia Senate Revives Pickup Truck Seat Belt Bill

The Georgia Senate this week revived and approved a proposal that would force pickup truck drivers to wear their seat belts.

The bill passed with a vote of 45-2. Bill sponsor Sen. Don Thomas, a physician and Republican from Dalton, says the measure will save lives and money in the state.

The state is the last in the country that exempts adults from buckling up in pickups. Though there is no opposition to the measure from lobbyists, rural lawmakers have blocked the bill as unnecessary regulation.Thomas says he is encouraged that the proposal, which has not had much luck in the House in years past, will fare better under that chamber's new leadership. Georgia would become eligible for federal incentive grants if the legislation passes.

Kentucky Senate Advances Texting While Driving Ban

A bill seeking to ban people from sending text messages while driving in Kentucky has won approval from the state Senate.

The measure would prohibit drivers from writing, sending or reading text messages when their vehicle is in motion. It cleared the Senate on a 27-6 vote earlier this week and has been sent to the House.

Under the bill, violators would receive a warning for the rest of the year.

Starting in 2011, violators would pay a fine of $25 plus court costs for a first offense, and a $50 fine plus court courts for repeat offenses.

Democratic Sen. Denise Harper Angel of Louisville, the bill's lead sponsor, said the proposal would deter reckless driving and save lives.

Opponents questioned how law enforcement would be able to enforce the measure.

Insurers await UK Budget Report

Insurers are waiting to see the impact of tomorrow’s Budget on insurance premium tax.

Steve White, head of compliance and training at the British Insurers Brokers Association said: “We have been working very closely with the revenue, we have made some suggested changes to the IPT legislation and we are hopeful that the changes we have suggested will appear in the budget.

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"The changes that we have suggested would bring the legislation more in line with the problems that they had with Homeserve that they are trying to address.”

Barbara Bradshaw, chief executive of the Institute of Insurance Brokers said that it is hopeful it will get the resolution that the organisation has been working towards.

In its budget predictions Heath Lambert said that its fear is that IPT will rise to 10%, but it wish is for it to stay at 5% as any increase would have a direct impact on all UK household budgets and would add to the cost of healthcare provision.

A spokesman for the Association of British Insurers said that it strongly oppose any increase to IPT, as it would discourage individuals and businesses from taking out adequate cover. Affordability is especially important for the less well off and smaller businesses particularly at this time.

Equality Bill passed by House of Lords

Harriet Harman, Minister for women and equality, today welcomed the completion of the Equality Bill’s third reading in the House of Lords.

The Bill, which sets out groundbreaking new laws that will help narrow the gap between rich and poor, require businesses to report on the pay gap between men and women and outlaw age discrimination, will now return to the House of Commons, where MPs will consider amendments made by the Lords.

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The changes made in the Lords include adding a power to outlaw caste discrimination.The Government will now look into the issue to see if action is needed.

Removing the prohibition on civil partnerships taking place in religious premises.This move, which was supported by religious groups including the Quakers and Liberal Judaism, means religious groups will be allowed to let civil partnership ceremonies take place in their churches, mosques, synagogues and so on if they choose to do so.It will not force any religious group to do anything that is not compatible with their faith.

A ban on asking for health and disability information prior to making a job offer. This will stop employers screening job applications to avoid interviewing people with disabilities.

Harriet Harman, Minister for women and equality, said: "I’m pleased that the Equality Bill has completed its third reading in the House of Lords and I want to thank our ministers in the upper chamber, Jan Royall and Glenys Thornton, for their hard work and commitment in steering it through to this stage.

"This is a historic piece of legislation that contains a range of new rights, powers and obligations to help the drive towards equality, including tackling the overarching inequality caused by where you are born and what your parents do for a living.

"I look forward to it taking its place on the statute books following further scrutiny by the House of Commons, but that will not be the end of the story. After the Bill is passed we will set to work implementing and enforcing it, putting equality firmly at the centre of government."

Six arrested in “largest ever” insider dealing investigation

Six men, including two senior city professionals, have been arrested in the Financial Services Authority’s “largest ever” operation against insider deal.

As part of the operation, the first jointly carried out between the FSA and the Serious Organised Crime Agency, 16 addresses have been searched this morning in London, the South-east and Oxfordshire with both documents and computers seized from residential and business premises.

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The six men have been arrested on suspicion of being involved in a sophisticated and long-running insider dealing ring. It is believed that the city professionals passed inside information to traders, either directly or via middlemen, who traded based on this information and have made significant profits as a result.

The operation was carried out by 143 FSA personnel together with officers from SOCA as part of a joint investigation that commenced in late 2007.

No further details can be confirmed at this time

Fitch Holds Conference on China's Life, Non-Life Insurance Sectors

Fitch Ratings hosted a teleconference today, March 11 on the performance of China's life and non-life insurance sectors. A replay of the conference is expected to be posted soon on the rating agency's web site at: www.fitchratings.com.

In an announcement prior to the conference Fitch said: "After years of chasing market share, Fitch believes Chinese life insurers will shift towards ensuring product quality rather than quantity - a key theme for the sector in 2010, lending support to the sector's credit profile.

Stanley Tsai, Director in Fitch's Asia Pacific Insurance Ratings team, added: "Furthermore, the potential of new investment channels, interest rate increases, and an increased regulatory focus on solvency, will be positive for China's life insurance sector in 2010."

Fitch said that it is taking "a slightly more cautious view on China's non-life insurance sector." Joyce Huang, Associate Director in Fitch's Asia Pacific Insurance Ratings team observed that "despite the robust growth momentum over the past few years, competition within the sector has led to fierce pricing. In addition, it is expected that the ongoing strong growth in low-margin businesses will continue to pressure non-life insurers' profitability and capitalization in 2010."

RSA Acquires Renewal Rights to TrygVesta's Marine Portfolio

The UK's RSA Insurance Group announced that its Danish subsidiary Codan Forsikring A/S has acquired the renewal rights to TrygVesta's marine hull portfolio for DKK 50 million [app; £6 million - $9 million].

RSA said the transaction is in line with its "focus on targeted growth in Specialty lines and strengthens Codan's position as the third largest marine insurer in the Nordic region.

"TrygVesta's portfolio represents around 7 percent of the total Marine hull market in the Nordic region and net written premiums in 2009 were approximately DKK 400m (£48 million - $72.22 million)."

The transaction is subject to regulatory approval.

Zurich Picks Perritaz to Replace Howie as Asia-Pacific/Middle East CFO

Zurich Financial Services Group has appointed Pascal Perritaz (37, Swiss citizen) to the position of Chief Financial Officer Asia-Pacific and Middle East (APME), effective April 1, 2010.

He replaces Iain Howie, who has been appointed CFO Zurich Australia. Perritaz will be responsible for coordinating and managing all financial aspects of Zurich's APME operations. He will report to Geoff Riddell, Chairman of Global Corporate and CEO of APME, and will be located in Zurich, Switzerland.

Perritaz joined Zurich in 1996 and in the following years held several roles in the global corporate business in Europe. "From 2005 to 2007 he was Chief Operating Officer, Global Corporate, of Zurich Insurance plc (ZIP) in Ireland, leading the set-up of Zurich's European ZIP branch network for the global corporate business," said the announcement. "Since 2008 he has been Group Operations Manager at Zurich's Corporate Center."

He holds a Masters degree in Economics from the University of Fribourg, Switzerland, is a Certified EFFAS Financial Analyst and graduated in 2009 from the Program for Leadership Development at Harvard Business School.

Massachusetts Implements Unemployment Inusrance Rate Freeze Legislation

Rate freeze along with additional reforms will encourage job creation and promote economic growth in the Commonwealth.

Governor Deval Patrick today signed legislation that will provide immediate relief to Massachusetts businesses by freezing employers’ contribution to the Unemployment Insurance (UI) Trust Fund at current levels.

This new law prevents a scheduled rate hike from taking effect, helping to save businesses almost $400 million this year.

“Without this legislation, employer costs were on track to rise by an average of over $300 per employee. That increase was simply unacceptable to us, “said Governor Patrick.”By freezing the rates at current levels, we are providing businesses with the immediate relief they need to invest and grow.

“By partnering with the Legislature, we are able to provide additional resources that will not only help businesses manage during this very critical time, but also focus on job creation and growth in Massachusetts,” said Lieutenant Governor Timothy Murray.

“In this tumultuous economic climate, this was a critical step in order to help bring some immediate relief to businesses,” said Senate President Therese Murray who recently introduced legislation that would take steps to improve business development by streamlining the state’s economic development efforts. “This is part of an overall effort we are working on to help improve the current business climate as we work toward bigger, long-term goals like streamlining economic development efforts and health insurance payment reform.”

“While we remain concerned about those who rely on unemployment insurance to survive, we must also lessen the burden on our businesses, which fund our unemployment system,” said House Speaker Robert A. DeLeo. “This bill has sent a clear message to businesses across the Commonwealth that we are serious about economic growth and job creation in Massachusetts.”

Employer contributions into the UI Trust Fund are tied to the amount of reserves in the trust fund. By law, a scheduled increase was triggered on January 1, 2010 which would have caused an increase in the average contribution per employee of over $300 for 2010. In order to reduce costs for Massachusetts businesses, the Governor and the Legislature agreed to freeze the contribution at a lower rate schedule (Schedule E). This measure will not impact benefit levels or eligibility for persons currently collecting unemployment benefits.

“I thank Governor Patrick and the Legislature for freezing scheduled unemployment insurance rates for 2010. This announcement will afford employers significant savings at a time when many businesses are continuing to struggle through a tough economy. This is the type of action AIM advocates for and will help lead to a strong economic climate in Massachusetts. We look forward to further meaningful discussions of related reforms,” said Rick Lord, President and CEO, Associated Industries of Massachusetts.

“In this economy, this rate freeze is very important as we look to hold employer costs down. Hopefully we can also get to a real reform package which can put us into the mainstream cost wise as compared to other states,” said Jon Hurst, President, Retailers Association of Massachusetts.

“I am pleased that the Legislature and the Governor acted so quickly to prevent UI costs from increasing dramatically this year, and I am optimistic that the Governor’s proposed UI reform will be enacted as well,” said Joanne Goldstein, Secretary of Labor and Workforce Development.

In addition to the rate freeze, Governor Patrick has proposed several other reforms to address the needs of employers of all sizes. Last week, in an address to the Boston Chamber of Commerce, the Governor unveiled a small business jobs incentive plan that provides tax credits for businesses that create new jobs, eases healthcare costs for small businesses and increases the availability of working capital to allow small businesses to expand. In addition, the plan strengthens the Workforce Training Fund, supports the Division of Unemployment Assistance’s anti-fraud measures and includes protections for workers by reducing unfair barriers to eligibility.

Together with the UI rate freeze, these additional measures will help foster job creation and further economic growth throughout the state.