Compliance

Atlanta - The use of credit information in underwriting and rating Florida homeowners and auto insurance policies is now threatened by yesterday's approval of a rule governing insurers' use of credit-based insurance scores, according to the American Insurance Association (AIA)."While the legislature passed a law in 2003, specifically authorizing the use of credit information for insurance underwriting and rating, today's administrative action by the Florida Cabinet may effectively ban insurers' use of credit information," said Cecil L. Pearce, AIA vice president, Southeast Region.

Indian Wells, Calif. - "For many financial institutions, a network security breach involving the release of confidential customer information is not a matter of if, but when," cautioned Tracey Vispoli, vice president, Chubb & Son, during the 2006 American Bankers Association Insurance Risk Management Annual Conference. "It's time for financial institutions to further tighten their data security controls and to prepare for the potentially significant financial cost of this risk."Vispoli, the global fidelity manager for Chubb Specialty Insurance, explained that new laws in nearly half the states require companies to disclose security breaches to their customers residing in those states. "Network security breaches expose companies to class-action lawsuits as well as irreversible damage to the corporate brand," she said. "The new state laws add another layer of responsibility and cost by mandating that companies notify customers of actual or suspected security breaches."

Blue Bell, Pa. - As ID fraud, privacy and compliance with security-related regulations continue to shake the mind set of how financial institutions think about securing their business operations, experts at Unisys Corp. foresee the following five trends that will help banks and insurers rebuild eroding customer trust, and maintain a competitive edge in 2006 and beyond:1. Coordinated, "industrialized" fraud attacks will continue to rise causing more government intervention and pushing financial institutions to work together on common standards to fight increasingly sophisticated cyber criminals.

New York - Lexington Insurance Co., a member company of American International Group, Inc. (AIG), has expanded it online training on its Web site at www.lexeplhelp.com for customers carrying employment practices liability (EPL) insurance.Launched in 1999 and formerly called www.eplselect.com, the Web site was developed to provide EPL insureds with free risk management resources and training tools.

Westborough, Mass. - According to a recent national survey, 54% of organizations have experienced cyber attacks, with 21% of the cyber attacks causing more than $100,000 in measurable damages, and 11% causing more than $500,000 in measurable damages.The 1st Annual Enterprise Security Survey, generated through an online survey of security decision makers spanning a wide range of industries, indicates that a vast majority of businesses are reliant on the Internet to conduct business and have experienced some form of cyber attack in the past year. Additionally, the survey demonstrates a trend in the change in security spending habits due to government regulations such as HIPAA and Sarbanes-Oxley.

Competitive pressures will force insurance companies to get serious about rationalizing the number of operational systems they support, notes a report issued by research and advisory firm Financial Insights, a Framingham, Mass., IDC company. The focus on rationalizing operational systems is one of the top 10 IT initiatives that will have key strategic importance for insurance organizations worldwide in 2006, according to the firm.

Framingham, Mass. - Companies ranging from regionals to multinationals will spend 2006 wringing more efficiency from their data storage infrastructures and holding down costs through information lifecycle management (ILM) rather than improving security, according to the "2006 Storage Budget Survey" released by GlassHouse Technologies, a provider of enterprise storages services.Despite a rash of high-profile security failures in 2005, nearly 100 companies in every size category--with storage budgets from less than $10 million to $150 million and above --ranked improving their storage infrastructure usage as either their first or second concern.

New York - In the face of these ever-growing business challenges and public scrutiny, it's time for insurers to take compliance to the next level, said Glenn Pomeroy, vice president of governmental relations and compliance at GE Insurance Solutions. Pomeroy addressed The 2nd Annual Forum on Regulatory Compliance in New York.Pomeroy, a former NAIC president and state insurance commissioner, outlined the components of a traditional compliance program: leadership commitment, employee engagement and a system to detect potential problems, address them and ensure ethical and lawful behavior.

Kansas City, Mo. - The top three reasons consumers filed formal complaints against their insurance companies in 2005 were delays, denials and unsatisfactory settlement offers, according to data collected by the National Association of Insurance Commissioners (NAIC).Following these claims handling issues, consumers complained most about policy cancellations and premiums/insurance rating issues. That complaint pattern has remained relatively consistent during the past four years. A total of 199,639 complaints were filed by consumers in 2005, a 22.5% decrease from 2004.

Framingham, Mass. - A recent survey of 802 consumers carrying health insurance, conducted by IDC's Health Industry Insights, reveals one in three respondents (33%) cite medical information being made accessible on the Internet as a primary reason for feeling less comfortable about sharing information with primary care physicians (PCPs).Nearly half of respondents (47%) who are uncomfortable sharing information with PCPs also indicated "wanting control over who accesses their personal health information" as a reason, while 14% do not trust the health plan to adequately protect personal health information.

Richmond, Va. - Genworth Financial Inc. has named Samuel D. Marsico senior vice president and chief risk officer (CRO). Marsico previously was CRO of the company's mortgage insurance business, where he helped support international expansion of mortgage insurance operations.Marsico will oversee more than 150 professionals dedicated to risk management across Genworth. He brings more than 25 years of experience to his new role. Prior to joining Genworth in 1997, Marsico held leadership positions in areas including audit for Price Waterhouse and finance at the General Electric Company. He replaces Mark W. Griffin, who became Genworth's chief investment officer in October 2005.

London -- Companies that outsource their IT systems are increasing their potential vulnerability to security breaches causing possible long term damage to their business, according to London-based insurer ACE European Group Ltd. (ACE).ACE has uncovered a lack of awareness among many European businesses of the increasing risks that outsourcing poses to their networks. ACE is also aware that there is a degree of uncertainty among many businesses, both as to the level of protection given to their computer systems and the cover provided by their existing insurance policies.

Cupertino, Calif. - Software security provider Symantec announced today that it completed its acquisition of Houston-based BindView Development Corp., a provider of agent-less IT security compliance software.

New York -- Guy Carpenter & Company Inc., a global risk and reinsurance specialist and a part of the Marsh & McLennan Cos., has published U.S. Reinsurance Renewals at January 1, 2006.This annual review of pricing, retentions and limits, capacity and terms and conditions covers the property, casualty, marine and offshore energy, accident and health and life and annuity lines of business.

Boston - A winter storm model for the U.S. that captures the effects of wind, precipitation, and freezing temperatures on insured properties should help insurance companies assess winter storm risk, according to AIR Worldwide Corp. (AIR), a Boston-based member of the ISO family of companies.

Newark, Calif. -- Risk Management Solutions (RMS) recently performed a number of analyses for the Congressional Budget Office (CBO) to assess the absolute risk of terrorism and quantify how the terms of the December 2005 renewal of the Terrorism Risk Insurance Act (TRIA) would shift the relative share of the risk from the government to the insurance industry.RMS analysis shows that while TRIA provides solvency protection in extreme events, it is not an insurance industry subsidy. Based on the new TRIA terms, over 90% of the RMS modeled average annual loss would be retained by the industry. If an attack occurred, there is also less than a 10% chance that it would cause the industry deductible to be reached, since only the most extreme, low-probability attacks will cause losses in excess of $30 billion. For example, the 2001 World Trade Center attacks resulted in approximately $32.5 billion of insured losses. Were an event of this magnitude to occur today, it would thus produce only a minimal TRIA recovery for the insurance industry.

Boston - Under an amended Terrorism Risk Insurance Extension Act (TRIA) law, insurance companies' loss retention will grow incrementally over the next two years, but will vary depending on the severity, location and timing of any future attack and on an individual insurer's actual book of business, according to AIR Worldwide Corp., (AIR). The Boston-based risk modeling company, which helps insurance companies manage the financial impact of catastrophes and weather, conducted an analysis of TRIA's potential impact on insurers. The Act was signed into law last week and extends the Terrorism Risk Insurance Act of 2002 (TRIA) through the end of 2007.

Jersey City, N.J. - The Terrorism Risk Insurance Extension Act of 2005, signed into law by President Bush, does not contain revisions that would affect insurers' use of a portfolio of terrorism insurance tools, endorsements and related rules from ISO, a New Jersey-based risk management services provider.

Newark, Calif. - Citing its latest win, catastrophe modeling is becoming increasingly important throughout financial markets, according to Risk Management Solutions (RMS), a Calif.-based provider of products and services for the management of catastrophe risk.

New York - Ernst & Young's Insurance and Actuarial Advisory Services (IAAS) practice today released highlights from its recent Risk Leadership Roundtable. The company gathered senior insurance industry executives to share preliminary results of its new "Insurance Industry Risk Leadership" survey.The roundtable included chief risk officers, risk managers and actuaries from the top 30 U.S. life/health and property/casualty insurance organizations. The Ernst & Young 2005 Insurance Industry Risk Leadership survey covers the current state and future plans of insurers with respect to enterprise risk management (ERM).