Digital Platforms

Joe Beneducci, president and chief operating officer of Novato, Calif.-based Fireman's Fund Insurance Co., has urged lawmakers to grant insurance carriers their choice of state or federal regulation. INN asked him about those options.INN: States regulate the insurance industry. Why would some insurers want to switch to federal oversight?

Hartford, Conn. and Indianapolis - Two insurers—Travelers and Anthem Blue Cross and Blue Shield—announced online tools for their customers. Hartford, Conn.-based Travelers announced new technology launches: Umbrella Wired and OSHA Recordkeeping, as a new component of e-CARMA.Umbrella Wired online software program is designed to simplify the rate, quote and bind process for agents who offer small commercial umbrella liability policies.

Warren, N.J. - C-level executives and risk managers may not always see eye-to-eye when it comes to the risks associated with international expansion, according to the 2007 Chubb International Risk Survey. More C-level executives (43%) noted that international risks pose a greater threat to their companies than domestic risks, compared to only 16% of risk manager respondents. There are also differences in the types of risks that C-level executives and risk managers are most concerned about when it comes to the companies' multinational exposures. The survey reports 24% of risk managers cited natural catastrophes such as hurricanes and earthquakes as the top threat posed by a company's overseas business operations or the business it conducts abroad, and 24% of C-level executives found terrorism to be the top threat. "The findings illustrate the importance of an emerging trend toward closer collaboration between an organization's risk manager and its most senior executives," said Kathleen Ellis, senior vice president, Chubb & Son, and worldwide manager of the Multinational Risk Group for Chubb Commercial Insurance, Warren, N.J. "To effectively allocate resources, organizations need a clear, agreed-upon big picture of global risk-one that's built on many perspectives. Companies that don't take this holistic approach could find themselves unexpectedly self-insuring losses that occur outside the United States and Canada." Professional liability evolving internationally Respondents' perspectives also differed on international trends in professional liability. More than half of C-level executives (59%) believe that employment practices liability is becoming a more serious source of risk outside the United States and Canada, while most (55%) risk managers say directors and officers liability is becoming a more serious source of risk. "These differing viewpoints on employment liability practices and D&O liability are intriguing, and we are keeping an eye of both issues-especially D&O liability," said Evan Rosenberg, a senior vice president at Chubb & Son and global specialty lines manager for Chubb Specialty Insurance. "There have already been more than a few significant D&O liability lawsuits in Europe. In addition, as more countries develop their own insurance marketplace, more of them could make D&O insurance compulsory or require the purchase of a locally admitted D&O policy to comply with local admitted laws. "Companies also need to recognize that some corporate governance trends start outside the United States. For instance, many European countries are taking a more aggressive position on disclosure than their counterparts in the United States on the global warming issue," said Rosenberg. According to Chubb's survey, only one in four companies (25%) is studying the impact of global warming on their business. "We have seen numerous shareholder proposals in the proxy statements of U.S. companies with respect to global warming; however, we have not seen a lot of disclosure from U.S. companies about what they are doing or their position with respect to global warming." Global growth continues "The ability to identify and successfully address emerging international exposures becomes increasingly critical as companies continue to become more global in nature," said Ellis. Of total survey respondents, 67% indicated that their company is likely to expand its operations outside the United States and Canada in 2007, and 86 % anticipated that revenue from these operations is likely to increase over the next five years. Respondents planned on growing their businesses through a variety of ways, including the introduction of new products (72%), an increase in employee headcount (66%), opening a plant or an office (62%) and the acquisition of another company (47%). Overall, survey respondents identified the following as the top threats to their overseas business operations or the business they conduct abroad: terrorism (18%), natural catastrophes such as hurricanes and earthquakes (17%), political instability (13%) and supply-chain failure (13%). In addition, the survey reported that the economic and political forces expected to have the greatest impact on a company in 2007 include increased competition (23%), rising fuel costs (15%) and the devaluation of the dollar (14%). "Today's multinational companies face diverse exposures to risk, and this makes it critical to develop enterprise-wide risk management programs," said Ellis. "Corporate executives and risk managers must look at all the risks to their business, domestic and international and whether they are insurable or not, if they wish to more fully protect their business operations." The 2007 Chubb International Risk Survey was conducted jointly in March 2007 by Opinion Research Corporation, a worldwide research firm in Princeton, NJ, and the Chubb Group of Insurance Companies in Warren, NJ. The Internet survey queried chief executive, operating and financial officers as well as risk managers at 242 U.S. companies. Summaries of the major report findings can be found on Chubb's Web site at http://www.chubb.com/corporate/chubb6893.pdf. Source: Chubb

South San Francisco - Financial services firms and banks have a far less clear picture of their business, and the factors that will ensure their future success, than they imagine, according to a report authored by Bernard Marr, a world expert in Strategic Performance Management and research fellow at the UK-based Cranfield School of Management. The report, 'Managing Strategic Performance in Banks and Financial Services Firms; From Going through the Motions to Best Practice' was published by Actuate Corp. a South San Francisco provider of intelligence, performance management and reporting applications, takes an in-depth look at 15 of the world's leading banks and financial services firms (including retail banks, investment banks, universal banks, one central bank and a mutual financial services firm) and their approaches to Performance Management to determine where firms are going wrong. At each company, between two and eight different principals, from MD to COO and CEO, were interviewed at great length about their Performance Management strategies. The report shows that many banks and financial services firms have been lulled into a false sense of security through over-reliance on historical financial information as their guide. They are failing to measure and manage the likely drivers of future performance - such as reputation, talent, customer relationships and organizational culture. Distracted by irrelevant and misleading performance indicators, or worse, failing to observe any of these indicators at all (despite being at pains to gather the data), organizations are selling themselves short by charging ahead with new business strategies, without bringing the rest of the business with them, or ensuring that every part of the firm is aligned with its current goals. This new report reveals that banks and financial services firms typically fall into three common traps when they approach Performance Management: measurement, compliance and risk - regardless of how formally they are managing performance, or the sophistication of the tools they are harnessing. Bernard Marr explains, "Despite being overrun with supposedly valuable performance data, many organizations appear to be plodding on regardless of the results. Already bloated Performance Management systems are being further obscured by compliance-related measurements, even though these might have little bearing on the future health of the business as measured by revenues, profit margins, competitive positioning and customer perception." Bernard continues, "Risk management activities, so vital in the financial services industry, are further clouding the picture. When these are not considered in the context of the wider goals of the business, organizations find themselves held back unnecessarily - or exposed to far greater risk than may be worth it for the business." In addition to identifying the challenges that organizations are facing, the report offers a series of best practices which include the effective application of Performance Management techniques, as well as the importance of measuring the factors that matter - not those which can be monitored most readily. These best practices are intended to guide firms toward success as they create a clearly focused, company-wide strategic performance culture. "Avoiding the traps identified in this research will guide banks in implementing a leading-edge Strategic Performance Management approach to keep them at the forefront of an increasingly competitive sector," said Richard Stark, director of Performance Management Solutions at Actuate. "Put Performance Management squarely in the context of the future of your business by measuring reputation, talent and customer relationships - use the results to improve behavior right across the organization and the results can be extremely powerful." To download the Cranfield report titled 'Managing Strategic Performance in Banks and Financial Services Firms; From Going through the Motions to Best Practice' please visit http://www.actuate.com/info/performance-mgmt-cranfield.asp. Source: Actuate Corp.

Toronto, Ontario - Pink Elephant, provider of IT management best practices, plans to launch ISO/IEC 20000 Essentials, a new course that will help organizations understand the benefits of adopting a quality approach to IT, as defined by the first global standard for IT Service Management, ISO/IEC 20000. Published by the International Organization for Standardization (ISO) in 2005, ISO/IEC 20000 is directly linked to the IT Infrastructure Library (ITIL), the best practices framework that focuses on aligning IT with the business, resulting in greater productivity and reduced costs. Despite the many strategic advantages, implementing ITIL has also been met with several challenges; primarily, gaining both management and staff support for a process improvement project. "By demonstrating a commitment to quality IT service provision, organizations can gain a competitive edge through ISO/IEC 20000 registration. We're seeing more RFPs that include this standard as a prerequisite," says Pink Elephant president David Ratcliffe. "ISO/IEC 20000 also plays an important role in preparing organizations for audits. With these two benefits alone, the executive team and IT staff can make a clearer connection between ITIL and how it addresses actual business pressures and concerns." The new ISO standard also allows the organization at large to receive recognition for following ITIL best practices, whereas before only individual ITIL certification existed; therefore, ISO/IEC 20000 represents a level of excellence that can be felt across all departments and is not limited to IT or its ITIL-certified practitioners. Pink Elephant's ISO/IEC 20000 Essentials is aimed at: * IT department staff of an organization that is considering or is already ISO/IEC20000 certified, so as to understand the breadth, depth and integration between the processes; * Contracts managers looking to construct RFPs to include ISO/IEC20000; the course will help explain what is involved in the standard; * Senior IT Managers, who will understand the importance of adopting a quality approach to Service Management and understand the value of ISO/IEC20000 accreditation; * Anyone involved in service provision; this course will show how ISO/IEC20000 will enable you to transform the service provision using best practice from ITIL and ISO9000. More information about course dates and locations, and in-house deliveries, will be available soon. Please visit www.pinkelephant.com for the latest updates or call 1-888-273-7465. For more information about ISO/IEC 20000, please visit www.iso.org. Source: Pink Elephant

Schaumburg, Ill. - Zurich announced the debut of eZ Transition, an online tool that bolsters the effectiveness of Zurich's return to work (RTW) program and supports a wide range of employers' RTW practices. According to a company statement, employers can use eZ Transition to generate customized RTW policies and procedures, create job description profiles with physical job demands, develop temporary transitional work assignments, develop RTW implementation and training materials, and access Americans With Disabilities Act information and state-specific Family and Medical Leave Act data. "Effective RTW programs like Zurich's can save 10-40% of workers' compensation medical costs and 14-25% of wage replacement costs," said John Kelm, President, Zurich Corporate Customer, North America. "With disability costs projected to increase 37% this decade due to the growing number of workers aged 45 to 64, an effective RTW program and tools like eZ Transition are now more important than ever to a company's bottom line. " The tool's design reflects the input from Zurich specialists in many facets of its operations, including claims, managed care, risk engineering and underwriting. It enables the creation of a customer-specific RTW profile and the implementation of preventative loss controls that will help reduce lost workday cases. The eZ Transition tool is available 24 hours a day, seven days a week to Zurich's workers' compensation customers through www.zurichna.com. Armand Fernandez, Risk Engineering Field Operations executive for Zurich, added that eZ Transition is flexible enough to adapt to employers of all sizes and program complexity, and complements Zurich's Absence Management consulting services. "Smaller employers are often unprepared for workers' compensation claims and even larger employers, with established RTW programs, frequently need assistance with physical job demands and transitional work assignments," Fernandez said. "Zurich's overall RTW program adapts to employers of all sizes, and provides the tools and directions they need to develop a comprehensive RTW solution for their specific needs, helping return their operations to normal as soon as possible." Source: Zurich, Schaumburg, Ill.

New York - The National Association of Insurance Commissioners (NAIC) launched a comprehensive public education program yesterday to assist small businesses with information about business risks and insurance options. Under the banner of "Insure U for Small Business," the campaign includes an online education site, public service announcements in English and Spanish, and community outreach by public information officers of state insurance departments. The Insure U for Small Business curriculum, which is available at www.InsureUonline.org/smallbusiness, includes six categories of vital information to small businesses: workers' compensation; group health and disability; business property and liability; commercial auto; group life and key person life; and home-based business insurance. After reviewing the curriculum's helpful explanations, tips and considerations, small business owners and managers can test their knowledge about insurance issues by taking an online quiz. Upon successful completion, they can download an Insure U for Small Business diploma. "Small businesses are a major engine for our national economy, employing millions of Americans and generating immense economic activity," said Walter Bell, NAIC President and Commissioner of the Alabama Department of Insurance. "Small business owners need to understand the array of business risks they face, as well as how to protect themselves with the right insurance coverage. Insure U for Small Business - supported by state insurance departments across the U.S. - will help small business owners and managers make smarter insurance decisions." Research conducted by the NAIC in March revealed that many small businesses - defined as those with fewer than 100 employees - are exposed to serious risks that could be mitigated by a better understanding of insurance options, according to Catherine Weatherford, NAIC Executive Vice President and CEO. Key findings of the research show: * Only 47% of small businesses offer heath insurance to their employees. Of those, 24% report changing the fee structure, deductibles or other components in the past year to offset the rising cost of premiums. - * Only 59% of small businesses with fewer than 20 employees have workers' compensation insurance, which state law requires for most companies. Workers' compensation insurance protects business owners from claims by employees who experience a work-related injury or illness. * Only 35% of small businesses have business interruption insurance, which covers expenses like payroll and utility bills that often continue after a major event (e.g., a fire or storm) shuts down a company. Because rebounding from a disaster can take a considerable amount of time, small businesses need to understand this risk and the available insurance options. * Only 48% of small businesses carry commercial auto insurance. The others apparently rely on personal auto insurance. However, personal auto insurance policies typically have lower liability limits and may even exclude business-related liability. * While 71% of small businesses say they are very dependent on one or two key people for their success and viability, only 22% have Key Person life insurance, a type of policy that enables a business to weather the death of a key employee or buy out the key person's heirs if ownership rights are involved. * Among home-based businesses - 22% of the NAIC survey - 48% depend on their homeowners insurance to protect their businesses. However, most homeowners insurance policies severely limit coverage of business property and may totally exclude business-related liability claims. "Insure U for Small Business represents a major commitment by the NAIC and its members - the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories - to help small business owners," Weatherford said. "It builds on the momentum of the NAIC's Insure U consumer education program introduced a year ago." The U.S. Treasury's Financial Literacy and Education Commission has embraced Insure U and made the program part of its National Financial Education Network. In addition to launching Insure U for Small Business, the NAIC is expanding its efforts to help insurance consumers avoid being taken advantage of by insurance scams. Fighting fake insurance is the focus of newly updated English- and Spanish-language television public service announcements (PSAs) encouraging individuals to call their state insurance department prior to purchasing an insurance policy to confirm that they are dealing with a company or agent authorized to do business in their state. Individuals may also call the NAIC's toll-free telephone number to find consumer representatives in their home state insurance departments. The number is 866-470-NAIC (6242). For more information about insurance, consumers can visit www.InsureUonline.org or, for the Spanish-language version, www.InsureUonline.org/espanol. Source: PRNewswire

Chicago - Multinational corporations are facing increasingly diverse, complex and exotic risks, and may not have all the resources in place to manage them effectively, according to a global risk management survey conducted by Aon, a Chicago provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. More than half of the survey's respondents said they weren't prepared for the risk they rated as most worrisome -- damage to reputation. "Executives now see reputation as a major source of competitive advantage," said Ruth Joplin, Aon Global Risk Consulting managing director. "While intangible, reputation is one of the most important corporate assets and one of the hardest to protect," she added. "The lack of preparedness reported for this and other key risks is both surprising and somewhat worrying." Joplin says it should come as no surprise that business interruption was cited as the second key risk. "Preserving earnings power is clearly one of the top priorities of senior management," she said, "and there is a growing realization that the resulting loss of income following an event could pose a greater threat than the physical damage itself. While 70% of respondents reported being prepared, it is perhaps even more telling that 30% are not." Survey responses suggest that third party liability risk concerns have arisen as a result of the encroachment of U.S.-style litigiousness into other geographies. "The 'compensation culture' is gaining a stronger global foothold," Joplin said. Rounding out the top five risk concerns, based on the survey's results, is distribution or supply chain failure, and market environment. Lack of preparedness for these risks is reported at 37% and 65%, respectively. What does this mean? "There is clearly more work to be done," said Joplin. "Dealing with these and future risk trends will require innovative, forward-looking solutions." Other top ten risk concerns rated by survey respondents are, in order, regulatory changes, failure to attract or retain staff, financial risk, physical damage and mergers and acquisitions and disaster recovery plan failure are tied for tenth place. Ranking Risk/description 1 - Damage to reputation 2 - Business interruption 3 - Third party liability 4 - Distribution or supply chain failure 5 - Market environment 6 - Regulatory/legislative changes 7 - Failure to attract or retain staff 8 - Market risk (financial) 9 - Physical damage 10 - Merger/acquisition/restructing 11 - Failure of disaster recovery plan Joplin says that that Americas is the only region where technology failure and loss of data are cited as a major risk concern, while Europe uniquely cites mergers/acquisitions/restructuring and Asia/Pacific is highly concerned with weather/natural disasters. Risk managers in the Americas tend to rely heavily on senior management intuition and experience to identify major risks as compared to other regions that rely more on business unit registers. The survey also indicates that corporate boards recognize the criticality of risk management and are engaged in the review of risk issues. Respondents reported identifying and understanding their risks is a top priority and many planned to take a more enterprise-wide approach to risk within the next two years. "By taking a more integrated, systematic approach to managing risk," Joplin said, "organizations can begin to actively start turning risk into opportunity." Aon's Global Risk Management Survey 2007 was conducted in late 2006 and early 2007 by Aon Global Risk Consulting, and is based on responses from 320 organizations in 29 countries. The Web-based survey, aimed at risk managers, CFOs, treasurers and others responsible for risk, addressed both qualitative and quantitative risk issues. Insight is provided by region, revenue and industry. Source: AON Corp.

Washington - Two Washington-based groups are pushing a set of common principles to Congress as it prepares to take up legislation that would renew the federal backstop for terrorism risk insurance. The Coalition to Insure Against Terrorism (CIAT), and the American Insurance Association (AIA), are passing their message to The House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises chaired by Rep. Paul Kanjorski (D-Pa.), who will hold a hearing on this issue tomorrow (April 24). A critical issue that must be resolved by the new legislation, according to CIAT and AIA, is the separate treatment for nuclear, biological, chemical and radiological (NBCR) attacks, which would recognize the unique characteristics of these events. Reports issued last year by the U.S. Government Accountability Office and the President's Working Group on Financial Markets confirmed that the private market has not provided coverage for NBCR attacks outside of workers' compensation lines. Insurers are required by state law to provide the coverage for workers' compensation. To address this issue, AIA and CIAT agree that the new legislation should contain a mandatory "make-available" provision that would require insurers to follow the standard workers' compensation model. The organizations' joint principles stress that the make-available provision must be accompanied by a clear acknowledgement that the federal government is responsible for NBCR terrorism losses above primary insurers' individual NBCR retention levels. Additionally, TRIEA's insurer co-pay requirement for NBCR would be eliminated. "Importantly, the CIAT/AIA joint principles call for the new legislation to be permanent, for the distinction between foreign and domestic acts of terrorism to be eliminated and to recognize the extreme nature of NBCR attacks through a lower deductible and certainty with respect to the role of private insurers in managing NBCR terrorism risk," said Marc Racicot, AIA's President. "These principles represent a set of parameters that we believe should be considered as part of any TRIEA extension bill." Martin DePoy, coordinator of CIAT's steering committee, notes that the organizations are gratified by the broad-based, bi-partisan support Congress has shown for continuing the terrorism reinsurance backstop, but says policyholders and insurers alike believe that new legislation should address some important issues that were not fully resolved by the Terrorism Risk Insurance Act and its extension. "We believe the new program should end only when Congress determines terrorism no longer is a significant threat," said DePoy. For more information, visit http://www.insureagainstterrorism.org Source: American Insurance Association

Pearl River, N.Y. - China Life Insurance Co. Ltd. became the first Chinese domestic insurance company to join the Association for Cooperative Operations Research and Development (ACORD) as a member.ACORD members participate directly with their peers and partners in the standards process regarding development, maintenance and management of ACORD standards. Members participate in working groups and committees, which manage and develop, and then vote on new standards specifications and maintenance requests to support both international and local business requirements.

Charlottesville, Va. - SNL Financial LC, a Charlottesville, Va.-based business intelligence provider, reached an agreement with the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., to acquire and publish statutory insurance data through SNL's database products.Statutory insurance data consists of detailed financial and operating data filed quarterly for more than 5,000 public and private insurance companies, including: line-of-business results, market share and geographic exposure, relevant calculated ratios, investment portfolio statistics, loss triangles, reinsurance relationships and more.

Indianapolis and Washington - During the past few months, legislation has been introduced in the U.S. Congress to repeal or alter the existing limited antitrust exemptions afforded under the McCarran-Ferguson Act.Many associations and organizations have publicly opposed the repeal. Among those are the National Association of Mutual Insurance Companies (NAMIC) and the Independent Insurance Agents & Brokers of America (IIABA).

Stamford, Conn. - Public and private companies—more than 66% of respondents—have received a record number of inquiries from potential board members who are concerned about their current directors and officers (D&O) liability insurance, an increase of 16% from 2005, according to the D&O Liability 2006 Survey on Insurance Purchasing and Claims Trends conducted by Towers Perrin. Nonprofit respondents received similar D&O inquiries from approximately 32% of their boards, up slightly (3%) from 2005.At the same time, the survey, which included 2,875 participants, shows that companies are responding to these inquiries by providing broader personal liability protection for directors and officers. In fact, 14% of those surveyed purchased Side A-only coverage in the past year. Side-A coverage provides D&O coverage for personal liability when they are not indemnified by the organization.

Hartford, Conn. - With the recent sale of a small business policy to Creative Music Adventures of Seattle, Wash., The Hartford Financial Services Group Inc. now maintains one million small-business policies in force across the country."This is an outstanding achievement for The Hartford," says Jim Ruel, senior vice president of small business insurance at The Hartford. "For years, we've been listening to what small business owners want, and then developing the right products and services to help our agents meet their clients' needs. Reaching this milestone in such a competitive market is a testament to our company's leadership and expertise in this field. As the number of small businesses in this country continues to increase, The Hartford will continue to find new ways to serve them."

Reston, Va. - The year 2006 represented the tipping point for using the Internet to buy auto insurance, says comScore, Inc., a Reston, Va., company that measures commerce in the digital world.

Criminals can imitate public or private Wi-Fi services to lure unsuspecting consumers and businesses into an ID theft nightmare, says TraceSecurity, a Baton Rouge, La., provider of security compliance management.

Stamford, Conn. – Insurance carriers in North America and Western Europe need to become more customer-oriented to remain competitive, according to a study by Gartner Inc., the research company based here.

Atlanta - A disk containing the personal information of 2.9 million Georgia residents has gone missing, state health officials say.

Bethesda, Md. – A self-described socially responsible mutual fund has withdrawn formal objections to the way two major insurance companies have handled climate change.

New York - New York City-based New York Life Insurance Co.’s consumer Web site was best in the nation among insurance and annuity companies in the fourth quarter of last year, according to Dalbar Inc., a Boston-based company that tracks Internet innovation.

New York - Parents can track the whereabouts of teenage drivers with the help of a global positioning system about to undergo testing by New York-based AIG Auto Insurance.

New York - Senior insurance executives are concerned about governing and managing the crushing volume of data their companies maintain these days, especially in light of stricter reporting requirements.

Edwardsville, Ill - Florists' Mutual Insurance Company (Hortica) has announced the loss of a locked shipping case containing backup computer tapes with personal information.

Denver - Despite some challenges, the health insurance industry continues to focus forward on initiatives that will enable patient-related data sharing in order to help eliminate errors and reduce overall costs. Anthem Blue Cross and Blue Shield in Colorado announced its participation in a voluntary data-sharing program developed by the Council for Affordable Quality Healthcare (CAQH), the company reports. The program, based on rules drafted by CAQH's Committee on Operating Rules for Information Exchange (CORE), is designed to link the data collected by health plans, providers, and vendors so that doctors can electronically verify their patients' insurance information in twenty seconds or less, significantly improving communications between providers and insurers. A report issued in February 2006 by Dublin, Ireland-based Research and Markets notes that insurers will benefit from a trend in widespread adoption of electronic capture of patient data. With solid benefits predicted, there still remain challenges, however. Alluding to the routine capture of documents and data for both regulatory and business intelligence purposes, the Research and Markets holds that "health care in the clinical setting has resisted this industry-transforming technology for nearly 20 years. The reasons: the lack of user-friendly interfaces for busy health care providers, lack of workflow understanding on the part of vendors, the expense and complexity of implementation and maintenance solutions, and the lack of transparent ROI for providers." Empirical data on long-term benefits for a program such as this may not be available yet, but carriers such as anthem BCBS nevertheless have high hopes for initiatives designed to create incentives for providers that will help improve communications between parties and create a "healthier" patient base in the process. The fact that the CORE program is a voluntary, industry-wide collaboration facilitated by Washington-based CAQH, may help the cause. Anthem has been certified as a CAQH CORE health plan and has already completed the Phase I implementation of the CORE rules, which allows for standardized data transfer and quicker response times. Physicians who link to the health plan through electronic data interchange (EDI) will be able to use EDI for this quick verification. EDI is a method for two organizations to confidentially exchange data from one computer to another using standard formats that are HIPAA compliant. Currently, Anthem's EDI is used for claims filing, claims status checks, eligibility verification, electronic remittance advices, and electronic fund transfers back to health care providers. "Anthem is committed to employing the most advanced information technology solutions available to improve both our members' experience and their interactions with physicians," said John Martie, president, Anthem Blue Cross and Blue Shield in Colorado, a subsidiary of WellPoint, Inc. "CAQH has developed an excellent framework for simplifying the administrative side of the health care system, and Anthem has worked diligently to ensure that we are capable of bringing the benefits of CAQH's efforts to our members." "These programs have the potential to transform the way that health care providers and health plans communicate," continued Martie. "But most importantly, they will take much of the confusion out of the health care system for our members." Sources: Anthem Blue Cross and Blue Shield, INN Archives

Washington - A new report calling for a review of the McCarran-Ferguson Act is troubling, said the National Association of Mutual Insurance Companies (NAMIC), Indianapolis. While the report - created by the Antitrust Modernization Commission - does not recommend repealing the antitrust exemption provided to insurance companies under the Act, its suggestion for Congress to carefully review it and other exemptions could ultimately lead to higher costs for consumers. "Many of the statements in the report indicate a lack of understanding of the business of insurance," said Carl Parks, NAMIC's senior vice president for federal affairs. "There are several statements that incorrectly characterize the McCarran-Ferguson antitrust exemption." For example, the commissioners contend that McCarran-Ferguson and other exemptions lead to higher prices, reduced output, lower quality, reduced innovation, and less competition. They also argue that a decision to provide an exemption is a decision to sacrifice competition and consumer welfare. "The exact opposite is true in the case of the nation's 5,000 insurers," Parks said. "It is the presence of the exemption that has fostered a vibrant and competitive marketplace affording consumers greater choice, lower prices, higher quality and more varied products and increased innovation, while ensuring a sound and stable marketplace." The report incorrectly contends that immunities and exemptions benefit relatively small special interest groups and spread their costs to the broad consuming public. Actually, McCarran-Ferguson benefits all insurance consumers and serves to safeguard consumer welfare, Parks said. NAMIC found other problems with the report. The commissioners state that solvency should not serve as justification for antitrust exemptions. In fact, solvency is an integral component of consumer welfare and protection in the property/casualty context, Parks explained. The report also discounts fears of litigation and legal uncertainty. "Essentially, the report says that insurers have nothing to fear from being subject to the antitrust laws as long as the cooperative behavior in which they're engaged has pro-competitive effects," said Robert Detlefsen, NAMIC's vice president of public policy. "The report is unduly confident that courts with little or no experience adjudicating insurance issues would be able to distinguish clearly between pro-competitive and anti-competitive practices. We are not nearly as optimistic about this prospect as is the commission." Detlefsen further said the report does not address the negative consequences for insurers and consumers that would result from the legal uncertainty and expense of private antitrust litigation to settle such questions if the exemption were to be repealed. "The main problem with the report is that (a) it assumes that courts applying a rule of reason analysis to alleged antitrust violations by insurers will actually make reasonable decisions; (b) it discounts the impact that costly and protracted antitrust litigation would have on companies and consumers; and (c) it ignores the extent to which the threat of litigation would inhibit insurers from acting cooperatively even if they thought that eventually their actions would survive antitrust scrutiny by the courts," Detlefsen continued. Ironically, Commissioner Jonathan M. Jacobson, who wrote a separate statement calling for the repeal of the insurance antitrust exemption as well as exemptions applying to three other industries, also opined that "the Commission would have better served the country through a more focused review of these four [exemptions] than by relying purely on the generalist overview reflected in our official recommendations." "We couldn't agree more," said Detlefsen. "Had the Commission more carefully examined the implications of repealing the limited insurance antitrust exemption, it's likely that Commissioner Jacobson would have reached a different conclusion." NAMIC, which today announced its membership in the Insurance Research Council, a public policy research organization providing objective analysis on a broad range of issues of vital interest to insurers, consumers, and public policymakers, opposes any changes to the McCarran-Ferguson Act. The organization reports that it will continue to work with members of Congress to inform them on the effects of the limited antitrust exemption on the insurance industry and America's insurance consumers. Antitrust Division's Statement The Antitrust Division of the U.S. Department of Justice made the following statement regarding the release of the Antitrust Modernization Commission Report. "The AMC has made many specific recommendations in its report, and the Division is in the process of reviewing all of them. The Division commends the AMC for its three primary conclusions: * Free-market competition should remain the touchstone of United States' economic policy. The Commission's conclusion in this regard is a fundamental starting point for policy makers. Over a century of experience has shown that robust competition among businesses, each striving to be increasingly successful, leads to better quality products and services, lower prices, and higher levels of innovation; * The core antitrust laws -- Sherman Act sections 1 and 2 and Clayton Act section 7 - and their application by the courts and federal enforcement agencies are sound and appropriately safeguard the competitiveness of the U.S. economy; * New or different rules are not needed for industries in which innovation, intellectual property, and technological innovation are central features. Unlike some other areas of the law, the core antitrust laws are general in nature and have been applied to many different industries to protect free-market competition successfully over a long period of time despite changes in the economy and the increasing pace of technological advancement. One of the great benefits of the Sherman and Clayton Acts is their adaptability to new economic conditions without sacrificing their ability to protect competition." To view the complete report visit www.amc.gov. Sources: PRNewswire/USNewswire, NAMIC, U.S. Department of Justice

Kansas City, Mo. - Security, developing Web portals, and going paperless are among the top focus areas for IT staff at surplus lines insurance companies, according to a survey of NAPSLO members conducted in February by the association's communications & technology committee.

Needham, Mass. - The time is right for U.S. property and casualty claims insurers to aggressively exploit the business benefits of an enterprise mobility strategy, according to new research from research and advisory services firm TowerGroup. TowerGroup's report, "Mobile Solutions for US Property & Casualty Claims: Life in the Fast Lane," maintains that while using mobile solutions for settling claims is not new to the U.S. insurance industry, adoption for claims processing has been haphazard at best. Insurance carriers have been slowly bringing on mobile technology solutions to assist field workers with claims operations, yet the process has lacked focus and forward momentum. Given the strides made by mobile technology vendors in functionality, bandwidth and devices, mobility solutions for the insurance industry are increasingly reliable - and can yield significant value if developed within a coordinated strategic initiative, says the report. "Customers are increasingly expecting real-time, any-time service from their insurance carriers," said Karen Pauli, senior analyst in the TowerGroup insurance research practice in Needham, Mass., and author of the research. "While many insurers have various mobility irons in the fire, catastrophes like Hurricane Katrina quickly exposed the limits of the haphazard solutions that are in place. It's time for carriers to step back and create an enterprise strategy for mobility that encompasses all aspects of the claims process." Highlights of the research include: * Mobile initiatives will yield significant value for carriers when the implementation directly impacts the most critical business issues facing carriers today, including: disaster response; business continuity; and meeting regulatory and compliance mandates. The report also highlights the key actions carriers must take in order to create an effective mobile strategy. * Carriers can improve day-to-day claims operations, gaining competitive advantage and saving costs, by using predictive analytics to direct activities in a mobile environment. * Before carriers jump into an enterprise mobility plan, they must carefully review the needs and workflow of their claims personnel. "Today, few carriers leverage the breadth of available mobile technologies that could contribute to claims process efficiency," continued Pauli. "Instead, it's more common to see stand-alone applications that have little to no integration with other claims applications or services. Stand-alones don't scale well, usually lack extensibility and cost too much. Carriers must develop a more holistic approach to claims mobility, one that arms the adjuster with the key devices and applications necessary to get the job done in the most efficient and effective way possible." Source: TowerGroup

Fayetteville, Ark. - Blue Cross Blue Shield will partner with the University of Arkansas and Wal-Mart Stores Inc. to create a research center that will focus on using information technology to improve the health care delivery system, the companies report. The center's creation was announced today during a health information technology meeting -- hosted by Wal-Mart -- of business, IT and health care leaders held in Rogers, Ark. The Center for Innovation in Health Care Logistics will conduct research designed to identify and address gaps and obstacles in the application and delivery of health information technology. The center will also serve to highlight and replicate proven applications that are working to benefit patients and providers. The goal of the center's work is to put the right materials in the hands of doctors and nurses where and when they need them; it also aims to eliminate the threat of medical errors arising from wasteful and unreliable practices in health care supply networks. The Center's initial work will address information technology-based innovations for bringing visibility and tracking to every level of health care procurement and distribution processes. Experience shows that such transparency leads to significant cost savings by eliminating duplication and confusion, enhancing collaboration among participating organizations and avoiding mistakes that can lead to dangerous errors. "Blue Cross Blue Shield is proud to join Wal-Mart and the University of Arkansas in this worthy venture," said Bob Shoptaw, CEO, Blue Cross Blue Shield Arkansas, Fayetteville. "We look forward to contributing to the advancement of health care technology through the creation of this research center." In making the announcement, Wal-Mart Vice Chairman John Menzer said the center's work will help fill a large information gap in the health care system. "The best example of this need was Hurricane Katrina. Medical records, property records, court records were lost. Entire family histories -- medical, cultural and otherwise -- were gone in an instant, and the entire region is still recovering from this massive loss of information," Menzer said. "The University of Arkansas has a strong track record of success with industry-university research collaborations in the ever-changing realms of information technology and logistics," said University Chancellor John White from the University's Fayetteville campus. "A fundamental purpose of any flagship university is to stimulate economic success and enhance quality of life. We are well positioned to leverage our logistics center experience to ensure success in identifying real solutions for transforming health care processes, which holds benefits for the State of Arkansas and the entire nation." Professor Ron Rardin will be the center's executive director. Before joining the University of Arkansas, Dr. Rardin led the National Science Foundation's efforts to foster research in health care delivery and later played a key leadership role in Purdue University's Regenstrief Center for Health Care Engineering. Wal-Mart, Bentonville, Ark., will pledge $1 million over five years to fund the center. Blue Cross Blue Shield of Arkansas, Alabama and Illinois have joined Wal-Mart as partners. The Center will also raise money from other private sector companies, government agencies and foundations to help conduct its research and demonstration projects. Source: PRNewswire

It may not have started with the vehement criticism logged by Sen. Trent Lott, R-Miss., and Rep. Gene Taylor, D-Miss., against Bloomington, Ill.-based State Farm over hurricane damages to their respective homes, but the negative press that's ensued in Katrina's aftermath is still haunting the insurance industry.Shortly after Lott's brother-in-law, high-profile plaintiff attorney Richard "Dickie" Scruggs, filed a federal lawsuit, however, a flurry of additional actions, some of which are being played out by state and federal regulators, thrust the P&C insurance industry into defense mode.

Insurance industry experts will argue for a long time about exactly how much the Sarbanes-Oxley Act (SOX) has cost the insurance industry. They probably can agree, however, that those costs are significant.Carriers incur the costs making sure they comply with the act, which aims to make corporate executives responsible for the accuracy of their financial statements and for the internal controls that minimize errors and reduce fraud.

The insurance industry can't agree on a definition of the phrase "enterprise content management." Whatever it means, though, there's a consensus that it's improving.Many think of it as combining absolutely every kind of documented information the company owns and putting it into a paperless electronic central repository that imposes business rules, manages distribution and affords virtually unlimited access. That master file would house everything from this morning's jpegs to digitized versions of yellowing old paper-and-ink policies.

SITE SELLS POLICIES ON GROWNUP TOYSMarkel American Insurance Co., Waukesha, Wis., launched a Web site that provides a single access point to customers seeking to insure motorcycles, boats, personal watercraft and ATV.

AGENTS AND BROKERS ADOPT NEW RPOST E-MAIL SERVICELos Angeles-based RPost U.S. Inc. says independent insurance agencies and brokerages are adopting RPost as a service platform for outbound e-mail. Confronted with errors and omissions (E&O) liability exposures, agents and brokers need technology that enables them to optimize electronic communications while minimizing risk. By shoring up the security gap, RPost Registered E-Mail messages offer speed, security, accountability and personal liability protection in a cost-effective solution that can be used for an average cost of 59 cents per message. The company's services provide the e-mail sender with legally valid evidence of what e-mail content and attachments were sent and received, by whom and when.

Not so long ago, discussions of IT security tended to focus on the need to install firewalls; to tunnel via private networks; to employ encryption keys and digital certificates; to surround servers with multiple layers of access; and to install firewalls, sandboxes and "demilitarized zones" to snag hackers.Those tools and methods remain critical, but many in the IT community are recognizing the importance of addressing physical as well as digital vulnerabilities.

MASSMUTUAL UPGRADES PRODUCT MACHINE SOFTWAREThe disability income insurance area of Massachusetts Mutual Life Insurance Co. (MassMutual), Springfield, Mass., upgraded to version 3.1 of Product Machine, a set of tools designed to enable users to build, design and publish products.

Hartford, Conn. - The surety business has recovered from a slump that began with the 2001 recession, according to a new study by Conning Research and Consulting Inc. "The combined ratio climbed more than 40 points and stayed there for the next three years," says Mark Jablonowski, an analyst at Conning, which has headquarters in Hartford. "While the recession and tightening credit resulted in skyrocketing losses, the property-casualty underwriting cycle also contributed to the problem." Those views are examined in a study called "The Surety Market: Taking Care of Business." It's Conning's first analysis of the surety segment, a business the company says has iinfluence well beyond its size because of its importance to construction and regulatory compliance. According to the study, a huge increase in losses during the 2001 to 2003 period wasn't just from claims reported but also from claims that developed badly and a falloff in recoveries and other claims mitigation, says Stephan Christiansen, Conning director of research. The situation turned round in 2004 and 2005, Christiansen observes, adding that 2006 showed continued improvement and the future looks good, too. Capacity is returning to the market but with a renewed appreciation for underwriting discipline, says Christiansen. "That new-found discipline, along with attention to automation and technology [that is]driving cost control," he says, "lead us to a positive forecast for the surety line over the next few years, with premium growing at least as fast as GDP." Source: Conning Research and Consulting Inc.

Washington - America's Health Insurance Plans (AHIP) has collaborated with The Centers for Disease Control and Prevention (CDC) to develop a checklist insurers can use to prepare contingency plans for a flu pandemic.

Rochester, N.Y. – Many Americans are satisfied with how their personal health information is used, but a substantial number express reservations about the confidentiality and security of their health data, a new survey shows.

Washington, D.C. – America needs a public-private partnership to protect families from a devastating, massive hurricane or earthquake, the head of a coalition that includes insurers said in testimony this week before Congress. Such catastrophes have dulled the industry’s appetite for insuring against such events, said another witness, a representative of an agents’ and brokers’ association.

Washington - The National Association of Professional Insurance Agents (PIA) has asked its members to challenge the U.S. Chamber of Commerce’s recent endorsement of optional federal charters for insurers.

Phoenix, Ariz. - Insurance industry groups have banded together to create eight data initiatives and a central data repository to combat fraud, according to the keynote speaker at an industrywide meeting here of property/casualty claims and special investigations executives.

BELLEVUE, Wash. - Symetra Financial has appointed Tommie Brooks as vice president and chief actuary. He will assume leadership of the Actuarial Division from Margaret Meister, who is relinquishing the post but continues to serve as executive vice president and chief financial officer.

San Francisco - Woodruff-Sawyer & Co., an independent insurance brokerage based here, has acquired Northwest Benefit Planning in Portland, Ore.

Unitrin Direct insurance cos., subsidiaries of Chicago-based Unitrin Inc., are offering a $50 discount in 17 states for customers who use Esignature, an service that lets customers sign policy documents online."One of our main goals at Unitrin Direct is to continually seek new ways to provide a terrific value on outstanding car insurance coverage," says Unitrin Direct President Scott Carter. "With Esignature, consumers not only save money instantly, they do it with the knowledge that they have a trusted company behind them that prioritizes customer service."

Branchville, N.J. – Selective Insurance Co. of America, a Branchville, N.J.-based subsidiary of Selective Insurance Group Inc., appointed three information technology services (ITS) managers.

Johannesburg, South Africa – Insurers looking to enhance their contact centers may want to consider convergence, primarily driven by the increased acceptance of internet protocol (IP) and improved reliability, scalability and proven benefits that come with maturing product sets. According to the latest findings in Dimension Data plc's "Global Contact Centre Benchmarking Report 2007," more than 60% of contact centers—representing a number of industries across 42 countries and five continents—have introduced IP-based or hybrid IP private branch exchange (PBX)/automatic call distribution systems (ACD), which is an increase from the 50% recorded last year.

London - Senior executives and risk professionals consider data loss the most significant threat and key issue to address in operational risk management planning, according to a global risk briefing report conducted by the Economist Intelligence Unit (EIU) and sponsored by London-based ACE European Group Ltd. (ACE).More than 40% of the 181 respondents said their organization focuses more on loss of data than other issues—including systems failure, human error and even natural disasters.

New York and Cupertino, Calif. - Last week brought yet another security scare to a health insurer. Empire Blue Cross Blue Shield, a New York-based subsidiary of WellPoint Inc., reported that Magellan Behavioral Health Services located a CD sent via UPS by Health Data Management Solutions (HDMS), a third party vendor to Magellan, an Empire benefit program administrator, that included some members' personal health information. The CD was lost in transit but was located. The insurer reports that although there was no indication that the CD had been stolen, last week Empire sent a letter to inform affected groups and members who may have been impacted.

Chicago - Aon Corp., Chicago, completed its acquisition of Valley Oak Systems, San Ramon, Calif. The terms of the transaction were not disclosed.

New York - Most corporate board members talk the talk about the importance of information technology to their company, but fewer are taking actions to align IT with overall corporate strategy. This is the overarching message coming out of a new survey, "The Board and Information Technology Strategies," by Deloitte Consulting LLP, a subsidiary of Deloitte & Touche USA LLP, a New York professional services provider, and Corporate Board Member magazine. The survey respondents also suggested a distinct and positive correlation between the attention paid to IT and corporate performance. The survey was conducted in the fall of 2006 and involved more than 450 directors of publicly traded companies with revenues of more than $1 billion. Financial services companies represented 19% of the mix, 7% in insurance. The directors responded to questions ranging from how often their boards discuss IT strategy to how they think IT has affected their companies' ability to effectively meet their business objectives. A significant gap does exist between the emphasis the board seems to place on IT and the things they are doing to address it, Larry Danielson, a principal with Deloitte Consulting who focuses primarily on the insurance industry, told Insurance Networking News. "This indicative of an insurance company board's comfort zone," says Danielson. "Boards are seasoned individuals who are asked to apply judgment on many different topics. In this regard, technology is a misnomer, because it's often thought of in the highly technical arena of software and hardware, when it's really about overall strategy, business change and improvement." According to the Deloitte & Touche report, directors and senior executives blame this gap on the number of other things that have been hitting the insurance company board's agenda, namely regulatory compliance and top line growth. "Top line growth varies by segment," says Danielson, "but clearly the life area faces some hurdles. With the influx of Baby Boomers seeking better retirement returns, life insurers are struggling with what to do, because their infrastructures are not designed in similar fashion to a typical investment firm. An investment company's business model is such that they can see every day where they stand financially." Some of the key findings and trends from the survey include: * Boards are not involved to the degree they believe they should be in IT; directors did not indicate a commensurate level of activity with the level of recognition of IT's importance.* Ten percent of boards relegate IT matters to a board committee. * Only 11% of boards discuss IT at every meeting. * Fourteen percent of boards are "completely and actively involved" in IT strategy. * Directors who report a higher level of involvement in IT matters have a better understanding of IT's importance to their business and their performance. * Directors report that effectiveness in executing on IT strategy correlates to better financial performance. Furthermore, the survey found that even though 22% of the respondents blame various aspects of IT strategy for their companies' inability to achieve its goals, 52% say their board will be spending no more time on IT over the next three years than it does now. The findings also indicated that when the CEO leads the discussion, boards are more completely and actively involved in IT. "In the not so distant old days, technology was more of a support system than an actual business strategy. Today technology and IT are key business strategies and typically are accompanied by capital budgets reaching as high as a billion dollars in larger companies," said TK Kerstetter, president and CEO of Corporate Board Member, a Brentwood, Tenn. publisher. "The days of not understanding IT in the boardroom are gone, and I expect we will see more CIOs and CTOs invited to serve as board members in the years ahead." According to Danielson, this may not be the ultimate solution for insurance companies, but it's a start. "It's important to get senior people to talk about technology," he says, "and as an adjunct, board members need to be better educated. They need a better understanding on lead-time for IT project completion, potential technology pitfalls and ultimate benefits. It's really about managing expectations upward." Source: Deloitte & Touche USA LLP

Dublin - Research and Markets, a Dublin research firm, released a new offering, “The Life Insurance Carriers Industry Report,” the company reports. The report includes 2007 and 2008 forecast estimates on the size of the industry (sales, establishments, employment) for the 47 largest world countries. The report also includes industry definition, 5-year historical trends on industry sales, establishments and employment and estimates on up to 10 sub-industries, including fraternal life insurance organizations, mutual association life insurance, and life insurance agents.

New York - A National Association of Insurance Commissioners personal lines working group expressed mixed feelings recently concerning a draft proposal that would authorize insurers to ignore current filed rates and competitively bid on applicants seeking coverage thorough a proposed electronic insurance exchange system. The "Alternative Recommendation for a Pilot Project Testing Pricing Freedom" draft, which was presented via conference call on February 22 to the Personal Lines Market Regulatory Framework Working Group, is based on the use of a technology platform called the "Insurance Exchange," sources at NAIC confirmed. The insurance exchange technology, first publicized by the Council of Insurance Agents and Brokers and reported in Insurance Networking News, March 2007, p. 6), is designed to streamline the underwriting process, says the NAIC draft proposal. The premise of the technology is to enable an insurance producer to complete a single application for a variety of insurance products and to submit that single application to multiple insurers. Insurers respond with a quote if they are interested in the risk. Once the applicant selects the insurer, the producer uses the insurance exchange to inform the insurer and the insurer issues the policy to the applicant. According to the draft proposed to the NAIC Working Group, which functions under the auspices of the NAIC's Speed to Market Committee, "In exchange for providing easy access to multiple quotations, the insurers could be offered pricing freedom through a pilot project that is enabled by interested insurance regulators." The proposal states that participating states use discretionary authority contained in current rating laws to enable a pilot project that: *Applies to personal auto insurance and homeowner insurance coverages (other products could be added); *Authorizes insurers to ignore current filed rates and competitively bid on applicants seeking coverage thorough the electronic insurance exchange system; *Allows an insurance producer selected by the applicant to assist the applicant with completion of a single application that is submitted through the system to all interested insurers; *Requires insurers to disclose coverage terms and conditions to the applicant, through the insurance producer, along with the competitive bid detailing the cost for the coverages requested by the applicant; *Provides insurance regulators with statistical information needed to evaluate whether the pricing freedom is providing applicants with sufficient information and broad selection among a variety of insurers and insurance products; and *Leads to a formal evaluation of the success or failure of the pilot project by participating states. The introduction of the draft, says Working Group chair D. David Parsons, Deputy Commissioner, State of Alabama Department of Insurance, was merely that: a simple introduction to the Working Group of the topic as "floating option" for possible consideration for a larger agenda of "developing a system that would be less intrusive, and that would allow carriers to get their products out to consumers in a more efficient manner." "We didn't have an official vote count or even a quorum," Parsons told INN, "but we did hear a number of states express disapproval [about the pilot], and a few that expressed positive feedback." Parsons attributes the disparate responses to the insurance industry's culture. "In some ways state regulation is cumbersome to the industry," he said. "There are so many diverse opinions. Our working group's charge is to try to improve that... get to the public more efficiently... at less cost to them and with good protection." Parsons admitted that the industry faces several large hurdles, including differences in filing issues, licensing issues and more. "There is a lot to be worked out," he said. "But this is a good group and they are passionate about their positions. We would like to see, at a minimum, flex rating come out of this," he said. Source: National Association of Insurance Commissioners