Digital Platforms

Indianapolis - When the Market Regulation & Consumer Affairs Committee at the National Association of Insurance Commissioners' (NAIC) agreed to do no further work on a model law regulating the use of claims databases for underwriting purposes, the National Association of Mutual Insurance Companies (NAMIC), Indianapolis, praised the decision. The decision by NAIC was made at the organization's winter meeting last week in Chicago

Boston - Following the release of a detailed China earthquake model earlier this year, Boston-based AIR Worldwide Corp. (AIR) and ISO, Jersey City, N.J., plan to open a Beijing Representative Office in China.

Sterling, Va.- The popular best practice initiative called the IT Infrastructure Library (ITIL) has become even more popular among financial institutions driven by service quality and a need to align IT with larger business objectives, according to Evergreen Systems, an IT technology and process consulting firm. ITIL is non-proprietary approach for managing IT that helps make business sense of tools, standards and processes. Evergreen released the results of an assessment survey of IT managers and executives, conducted at the IT Service Management forum (itSMF) conference in late September.

Atlanta, Ga. - The fact that the USA Patriot Act requires that all entities defined as financial institutions for Bank Secrecy Act purposes establish anti-money laundering programs has not been lost on LOMA, an Atlanta-based insurance and financial services industry trade association. The group is releasing an online anti-money laundering (AML) course on LOMALearn Online-LOMA's growing e-Learning portal.

Columbus, Ohio - Nationwide introduced a new look and feel for its main consumer web site, nationwide.com. The re-design represents the first phase of a multi-year overhaul, the company reports.

Westlake Village, Calif. - The Hartford Financial Services Group Inc. has been recognized for call center operation customer satisfaction excellence under the J.D. Power and Associates Certified Call Center Program. The Hartford property and casualty sales and service centers are the first in the insurance industry to be certified under the program.Through its direct personal lines business, the Hartford, Conn.-based carrier handled more than 10,000,000 telephone, e-mail and fax interactions in 2004 from its call centers in Southington, Conn., Allentown, Pa., Santee, Calif., and Oklahoma City.

Chicago, Ill. - If revisions to the Model Audit Rule, formally known as the Model Regulation Requiring Annual Audited Financial Reports, are passed, insurance companies with more than $500 million in direct and assumed premiums will be required to perform an annual assessment of their internal controls that apply to financial reporting.

Washington, D.C. - The U.S. House of Representatives on Wednesday passed a bill extending a federal program that guarantees the government's support of some losses from terrorist attacks, a measure that insurers and property owners call critical to the economy.

Stamford, Ct. - The lack of IT budget and resources, and perceived higher priorities for spending elsewhere will no longer be a barrier for P & C carriers making major investments in claims technologies, according to a report released today from Gartner, a Stamford, Ct. research firm. In fact, tight profit margins and high operational costs, as well as consumer demands for quality service, are now driving insurers to address these problems, says the report's author, Kimberly Harris-Ferrante, who predicts that claims technology and process improvement projects will increase by more than 20 percent in 2006 among P&C insurers.

Chicago - Blue Cross Blue Shield's vision for rounding out its consumer-driven products initiative took a giant leap forward today with the announcement of a new bank to help BCBS companies provide its customers with more technical tools and greater financial options to manage how they direct their healthcare spending.

Using the right analytic tools to analyze and manage terrorism risk is paramount, according to a review of methodologies available for insurers and reinsurers published by Boston-based AIR Worldwide Corp., a risk management division of ISO, Jersey City, N.J.

They began in the late 1990s as personal Web sites for hobbyist-authors to climb on their soapboxes, voice their opinions and reveal their daily activities to the whole wide world. Today, there are more than 17 million "blogs"-short for weblogs-and they're making their way into the business world, including the world of insurance."Weblogs have such a strong appeal to Web users," says Julie Ferguson, a communications consultant for Lynch, Ryan & Associates, a Westborough, Mass.-based workers' compensation consulting firm. "They're an important source of information, and if companies do them right, they speak with a more authentic voice than other forms of communication."

Since 2000, when the Gramm-Leach-Bliley bill made it possible for banks to enter the insurance business, the selling world has seen an invasion of financial institutions, such as Wachovia and BB&T, who have bought insurance agencies or created their own to sell life, disability and other products.Now, the insurance industry seems to believe that turnabout is fair play. In addition to a number of insurance companies, including MetLife, State Farm and Allstate, that created their own banks several years ago, one firm, InBank, is going so far as to offer insurance companies "private-label banking," which executives say allows insurers to sell banking products without the attendant capital costs and regulatory responsibility.

Although insurance carriers have been slower than banks in adopting e-billing and e-payment technologies (see "Carriers Have Some Catching Up to Do), two insurers recently have taken a lead in this area.Esurance, a San Francisco-based direct-to-consumer auto insurer, has added a PayPal payment option to its Web site. PayPal is one of the leading forms of online payment, with approximately 79 million accounts worldwide.

As wildfires scorched California's Los Angeles and Ventura counties in October, thousands of firefighters tried desperately to extinguish the flames that-fanned by dry winds-threatened to spread.Homeowners weren't the only ones following the spiraling fires with concern, as insurers, too, have seen how once seemingly safe urban areas are now vulnerable.

All financial institutions are faced with a basic business question: What is the best use of available funds? Historically, within the insurance industry, this issue of capital allocation has been addressed using some very basic projections of future balance sheets and profit-and-loss statements, with capital projections based on regulatory capital requirements.Global insurers-as well as regulators and rating agencies-are warming to the principle that capital requirements should be based on an assessment of the true underlying risks to the business. Only then can a proper decision be made as to whether one strategic option may be better than another. Without such an analysis, a company might adopt a particular strategy that, over time, eats away at capital and results in a very inefficient use of available funds.

By converting from paper to e-billing, companies can reap appreciable cost savings, achieve significant efficiencies, hasten incoming payments, gain greater accuracy in accounting and invoicing systems, and reduce labor operations.But only a relatively few carriers have thus far converted to e-billing, also known as Electronic Invoice Presentment and Payment (EIPP).

The debate in the industry over an optional federal charter for insurance companies has been brewing for several years. But now, there are some numbers that attest to the value of a single federal regulator-at least for the life insurance sector.More than $250 million, or 55% of all regulatory costs, are directly related to addressing the requirements of multiple regulatory jurisdictions, according to a recent study conducted by the American Council of Life Insurers (ACLI), Washington, D.C., and El Segundo, Calif.-based Computer Sciences Corp. (CSC). A majority of respondents to the ACLI/CSC survey indicated their companies had lost premium (73%) and deferred or shelved products (83%) as a result of delays in the state-by-state approval process. What's more, nearly every aspect of a life insurer's delivery system is affected by regulatory costs-from designing new products to paying claims.

Washington, D. C. - Health insurance plans are advancing information technology (IT) on many fronts, and in the process are achieving impressive results in health care quality, service, cost, and efficiency, according to a report issued by America's Health Insurance Plans (AHIP), a Washington, D.C., national trade association. "Innovations in Health Information Technology" profiles more than 40 innovations in the use of health IT that address a variety of healthcare system needs with effective new solutions.

Kansas City, Mo. - Representatives of the Financial Crimes Enforcement Network (FinCEN) of the United States Department of Treasury will be attending the National Association of Insurance Commissioners (NAIC) Winter National Meeting in Chicago during the Antifraud Task Force meeting on Monday, December 5, to present two final rules that will affect certain insurance companies.

WASHINGTON, D.C. - The National Association of Insurance Commissioners' (NAIC) gathering Dec. 3-6 in Chicago includes a full and varied agenda, but the American Insurance Association (AIA), a Washington, D.C., trade association, is giving catastrophe funding top billing. The group says it will participate in a three-hour public hearing on catastrophe issues as regulators consider the idea of creating a national catastrophe fund.

New York - CIGNA Inc. is expanding its on-line pricing data for consumers, the company reports.

In a new report, Celent, a Boston-based research and consulting firm, predicts how new technologies are impacting the future of the insurance industry.

Western United Life Assurance Co. (WULA), a Spokane Valley, Wash., provider of annuity products, has successfully completed conversion of its first block of business from its legacy environment to AdminServer Inc., a Chester, Pa., provider of administrative software and services.

Chicago - The Blue Cross and Blue Shield Association (BCBSA) and Visa USA have agreed to support participating Blue Cross and Blue Shield companies nationwide that are offering their members co-branded debit cards to pay for healthcare related expenses. The Blue-branded Visa debit card will allow customers to pay for qualified medical expenses by providing them with access to their health plan personal savings accounts. The co-branded cards are part of a larger initiative by Blue Cross and Blue Shield to provide consumers with the information and tools they need to make better decisions healthcare for themselves and their families.

Zurich, Switzerland - Swiss Re has agreed to acquire GE Insurance Solutions, the fifth largest reinsurer worldwide, from General Electric Co. (GE) in a $ 6.8 billion (U.S.) transaction.The acquisition is designed to add a strong franchise to Swiss Re, complementing its own strengths. After the closing of the transaction, Swiss Re would have estimated combined revenues of CHF 46 billion (based on 2004 figures) and assets of CHF 265 billion (as of June 2005) and a highly diversified business globally.

Washington, D.C. - The American Insurance Association (AIA) is urging insurance regulators to go slow in considering a national catastrophe insurance program, affirming support for catastrophe modeling technology but discouraging federal and state governments from storming through private sector business practices.

Oakbrook Terrace, Ill. - Chicago-based ISMIE Mutual Insurance Co., has become the latest carrier to adopt online education designed to help emergency medical professionals reduce their liability claims.

New York, N.Y. - Financial services companies are currently capturing less than one-third of the potential cost savings offered by offshoring operations, according to a study by Deloitte Touche Tohmatsu (DTT).

New York, N.Y. - The Risk and Insurance Management Society, Inc., New York, has launched an initiative to become the premiere resource for Enterprise Risk Management (ERM). The launch follows a survey of more than 1,000 members that revealed that nearly two-thirds of respondents are either involved in the development of an ERM or are considering it. The Center, which will be housed on the RIMS Web site, will be constantly updated with relevant Internet links, articles and professional development opportunities.

New Orleans - McGlinchey Stafford PLLC, a law firm based in the Gulf Coast region, has developed a weblog for companies with business interests in hurricane-affected areas. The blog, found at www.hurricanelawblog.com, features up-to-date information about post-hurricane legal issues, including insurance, real estate, healthcare, environmental, finance and litigation.The blog, which was created in response to client needs, offers businesses a single location to find information regarding legislation, litigation, and regulatory issues in and affecting Louisiana, Mississippi, Texas and Alabama. McGlinchey Stafford's hurricane blog will serve as a central repository for relevant information from both federal and state organizations, legislative bodies and courts.

Kansas City, Mo. - The National Association of Insurance Commissioners (NAIC) has selected CooperKatz & Co. to promote a major national public education program focused on teaching consumers how to select the right type of insurance coverage to fit their needs and how to protect themselves from buying worthless policies from fake insurance companies."We chose CooperKatz for their broad knowledge of insurance issues and deep experience in consumer public relations," says Catherine J. Weatherford, NAIC executive vice president and CEO. "They demonstrated a combination of solid strategic thinking, outstanding creativity and great enthusiasm to help us achieve our goals."

Pittsburgh - Highmark Inc., an association of independent Blue Cross and Blue Shield plans, is contributing $26.5 million to The Pittsburgh Foundation, which will use the funds for an electronic prescribing (ePrescribing) initiative.The foundation has created the Highmark eHealth Collaborative to encourage the adoption of health information technology used in patient care in order to improve patient safety and quality while increasing cost efficiency.

San Francisco - The results of a newly released consumer survey commissioned by TeaLeaf Technology Inc. and conducted by Harris Interactive indicate that online transaction failures can have a detrimental impact on businesses, forcing customers to abandon transactions.The study, which focused on consumer transaction experiences on shopping, banking, travel and insurance Web sites, found the vast majority of online consumers (89%) say they experience problems when conducting online transactions.

Horsham, Pa. - NextGen Healthcare Information Systems Inc., a subsidiary of Quality Systems Inc. has completed a pilot project with Empire Medicare Services, a fee-for-service Medicare contractor, and the Workgroup for Electronic Data Interchange (WEDI) Foundation to facilitate the use of electronic attachments between a health plan and its providers.The pilot program, which was funded for Empire Medicare Services and WEDI by the Centers for Medicare & Medicaid Services (CMS), tested the use of electronic claims attachments in accordance with HIPAA's transaction code sets, including ANSI 275 and 277.

Jersey City, N.J. - ISO and claims technology provider First Notice Systems (FNS) have entered into an agreement to deliver a new first-notice-of-loss (FNOL) fraud-detection solution to the property/casualty insurance marketplace.

Indianapolis - The National Association of Mutual Insurance Companies (NAMIC), an Indianapolis-based full-service national trade association with more than 1,400 member companies, has unveiled the latest version of its Web site, NAMIC Online, featuring simplified site navigation, streamlined page layouts and realigned presentation of content. The site contains information on public policy and legislation as well as advocacy, including state agendas and resources, and state, federal and association news. Its redesigned information tools assist visitors to find the information they want more quickly and efficiently. Founded in 1895, NAMIC underwrites 43 percent ($196 billion) of the property/casualty insurance premium in the United States. Source: NAMIC

Warren, N.J. - Chubb Group of Insurance Companies, Warren, N.J., has released its Business Recovery Planning Guide, a CD-ROM designed to help businesses create site-specific plans. The interactive CD-ROM features revised editable questionnaires and checklists to help companies analyze their current exposures and develop a business-recovery plan.

In 16 states and the District of Columbia , independent agents and brokers now can go online and quote complex package operations (commercial property and general liability insurance combined) with the same ease as writing a Safeco businessowners policy (BOP). That's because Seattle-based Safeco has fully automated the sale of commercial insurance packages to more than 800 classes of small- and mid-sized businesses.Accounts such as manufacturers, restaurant chains and auto mechanics can be quoted online in as few as 15 minutes, with the first price being the right price, the company claims.

Boston and Bothell, Wash. - SC-integrity and Lexington Insurance Co., a member of American International Group Inc. (AIG), are working together to encourage motor carriers and shippers to reinforce their risk management activities to concentrate on the issue of cargo theft.SC-integrity, a Web-based technology and data solutions company, and Lexington believe a significant reduction in theft losses can be achieved through a combination of security driven loss prevention techniques and a new cargo theft protection device. Called SC-tracker, the state-of-the-art tracking and monitoring technology is a rechargeable, portable tracking unit that is buried within the cargo and not installed on the trailer, which allowis the cargo to be tracked from point of origin to point of destination remotely over the Web. While in transit, the tracking unit reports its location every 30 seconds for over a week. The monitoring system will immediately notify security personnel if the cargo is being stolen.

Boston - As the congressional battle to extend the Terrorism Risk Insurance Act (TRIA) gets into full swing before the law's December 31, 2005, expiration, a new Web site launched by Liberty Mutual is designed to helps commercial insurance policyholders take an active role in securing an extension for this critical federal insurance backstop.Risk managers can use the site to encourage their federal legislators to support TRIA's extension, they can distribute the site's link to help their company's senior management push for the extension, and they can use the site to involve employees at all levels.

Brookfield, Wis. - Fiserv, Inc. has acquired Xcipio, Inc., a Web-based insurance rating and automation solution provider. The acquisition will allow the Brookfield, Wis., company to provide Web-based comparative insurance rates directly from insurance carriers to producers in real time. Details of the transaction, which closed November 1, were not disclosed.

El Segundo, Calif. -- Computer Sciences Corp. has been awarded a contract by the Federal Emergency Management Agency (FEMA), a branch of the Department of Homeland Security, to continue supporting the U.S. federal government's National Flood Insurance Program (NFIP). CSC estimates the value of the contract, which has a three-month base period and two one-year options, to be approximately $35 million if all options are exercised.This new agreement follows and is incremental to a contract signed with FEMA in 1999 under which CSC provides training, consultation and analytical support services.

McClean, Va. -- Insurance companies that have not already implemented business process automation technology, including straight-through processing, integrated client information systems and service-oriented architecture (SOA) for customer service and administration functions, can improve efficiency by doing so. That's according to a report, titled "How To Create A Platform for the 21st Century Insurance Firm," released by BearingPoint Inc. a global management and technology consulting firm.In fact, the resulting increase in efficiency and productivity can mean greater capacity and as much as 30% costs savings contributing to overall better profitability, according to BearingPoint.

Just when insurance companies were feeling better equipped to solve the puzzle of requirements presented in the Sarbanes-Oxley Act (SOX), the United Kingdom and the 24 other member states in the European Union (EU) are now commenting on the EU Commission's proposed regulations on solvency that could be finalized as early as 2008. Called the Solvency II proposal, the regulations are not unlike the Sarbanes-Oxley Act, and could add more layers of regulatory reporting for insurers.American carriers and reinsurers need to get up to speed on Solvency II, say analysts, because down the road, the regulations could impact U.S. accounting and insurance standards.

With new research from the Insurance Institute for Highway Safety, Arlington, Va., finding that drivers using cell phones are four times more likely to get in a crash serious enough to injure themselves, auto insurers are beginning to educate drivers about the risks of driving while talking on cell phones.Dan Cohen, a spokesperson for 21st Century Insurance Group, says the study underscores the need for insurance companies to encourage their clients not to drive and call at the same time.

Since the promise of further USA PATRIOT Act promulgation by the U.S. Treasury Department fell away in June, life insurance and annuity companies have been holding their breath, waiting for an imminent vote by the 109th Congress that could add even more regulatory compliance requirements for carriers.And while the final version of Section 352 of the USA PATRIOT Act may be looming, what it will mean for the life insurance industry is still in question.

Okemos, Mich. - A new self-service tool that uses advanced technology to tap into and analyze extensive claims information has been launched to help Delta Dental customers administer their dental benefits."We developed the new tool to help benefit professionals save time by accessing their dental benefits information when they need it," says Thomas J. Fleszar, president and chief executive officer of the Delta Dental Plans of Michigan, Ohio and Indiana.

Seattle - PEMCO Insurance, provider of auto, home, boat, life, and umbrella insurance to Washington state residents, has launched a teen drivers Web site designed to educate parents, teachers, and teens about the dangers young drivers face. The Web site can be found at http://www.pemco.com/teen_driver/index.asp."Teens have the highest car-crash death rate of any age group," says PEMCO spokesperson Jon Osterberg. "The main reason is, they're inexperienced drivers, and only experience can sharpen their skills. PEMCO wants to help teens grow into experienced, safe drivers."

John Hancock Financial Network, a subsidiary of John Hancock Life Insurance Co., Boston, Mass., has signed a three-year renewal agreement with Financial Profiles, a Carlsbad, Calif., provider of financial advice software, consulting, training and support services, to use its industry standards planning software.

Santa Ana, Calif. - The principal subsidiary of The First American Corp.--First American Title Insurance Co.--has formed a strategic alliance with Microsoft Corp., Redmond, Wash., for early testing of Microsoft SQL Server 2005 using First American's FAST Transaction System (FAST) database.FAST is an integrated title and escrow system that unifies disparate systems into a centralized database and is currently one of the largest SQL Server 2005 implementations with more than 4 terabytes of data. Microsoft encouraged First American's FAST development team to test SQL Server 2005 against one of the largest and most complex databases available. Using a version of FAST with all personal information removed, Microsoft was able to validate SQL Server 2005 and improve system capabilities, ensuring that the new release of SQL Server will be "FAST Certified" at the product launch on Nov. 7, 2005.

Hartford, Conn. - The Hartford Financial Services Group, Inc. has unveiled a new home page to its agency portal. The new home page of The Hartford's Electronic Business Center (EBC) was designed based on agent feedback requesting a cleaner, user-friendly page that will quickly and efficiently support agency workflows.