Compliance

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.

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.

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.

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.

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).

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.

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. - 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."

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.

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.

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.

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.

Des Plaines, Ill. - Ernie Csiszar, president and chief executive officer (CEO) of the Property Casualty Insurers Association of America (PCI) is calling on insurers to re-think their approach to regulatory reform, saying that the issue will be a top priority for PCI in 2006. Csiszar made his remarks during the opening ceremony of the association's Annual Meeting in Chicago today."Because of our inability to make meaningful changes to the regulatory system, perhaps it's time to reassess our tactics and try an entirely new approach," said Csiszar. "All of us have been pointing out the flaws in the regulatory system for the past decade. It's disjointed, inefficient, stifles competition, expensive and antiquated. Most importantly, it is untenable in the long term and must change."

Kansas City, Mo. - The National Association of Insurance Commissioners (NAIC) has formally approved enhanced disclosure requirements for insurers that utilize reinsurance with limited risk transfer features, also known as finite reinsurance.