Core systems

Sarasota, Fla.- Kirk A. Sexton will take the reins as chief information officer of Unisource Administrators Inc., a workers' compensation third-party administrator that provides workers' compensation products, claim management, managed care and payroll services, to more than 15,000 employers in the southeastern United States.

Kansas City, Mo. - The National Association of Insurance Commissioners (NAIC) is taking steps to amend disclosure requirements for insurers that use reinsurance with limited risk transfer features, also known as finite reinsurance. The use of so-called finite reinsurance has received considerable attention over the past several months, because of its misuse by some high-profile insurers. State insurance regulators, working in a coordinated fashion through the NAIC, have been evaluating existing relevant statutory financial reporting since last fall. The latest proposed disclosures would require an insurer to report to state insurance regulators any agreement that has the effect of altering policyholders' surplus by more than 3%, or representing more than 3% of premium or losses. The new disclosure is also designed to identify any reinsurance contract that has been accounted for differently under statutory accounting principles compared to general financial statement purposes. Additional reporting requirements regarding contract terms and management's intention in entering the contract have been included to improve transparency. The provisions include that there are no separate agreements between the insurer and the reinsurer that could serve to modify the actual or potential losses under the contract, and that the insurer complies with all requirements of NAIC's statement of statutory accounting principle (SSAP) No. 62, "Property and Casualty Reinsurance."Source: NAIC

Peoria, Ill.- RLI, a property and casualty carrier and provider of surety bonds to niche or underserved markets, established a strategic information services department to manage and develop RLI's strategic and management information services. The newly formed department's goal will be to create accurate and consistent information that can be efficiently delivered to RLI managers and executives to enable them to react to potential problems and opportunities.The new business unit "will be essential in managing our growth and achieving greater profitability," says RLI President & COO Michael J. Stone.

Fireman's Fund Insurance Co. Novato, Calif., has taken a third major step in its total IT transformation by awarding IBM a ten-year $94 million contract to modernize a major portion of the property/casualty insurer's application, development and maintenance software into an On Demand infrastructure that could reduce the number of major applications by 70 percent while improving customer service. When completed, the work could save Fireman's Fund $200 million, more than double the project's actual cost.With IBM's assistance, Fireman's Fund will shift its IT operations to an Internet-based computing model known as a "service-oriented architecture" (SOA) that enables consolidation of costly, redundant applications. Under Fireman's Fund direction, IBM will sift through mission-critical applications using a unique IBM Business Consulting process called Component Business Modeling to determine which applications deliver the most value to the business and which processes can be refined, consolidated or eliminated.

Nashville, Tenn.- HealthLeaders-InterStudy, a provider of managed care industry intelligence, finds that CIGNA HealthCare has turned a corner in North Carolina. According to the latest issue of the North & South Carolina Health Plan Analysis, the national insurer's North Carolina HMO license tripled its net income in 2004 yet decreased premium revenues by 21%. It was the most dramatic turnaround among North Carolina's HMOs. CIGNA's HMO posted 2004 net income of $18.7 million on revenues of $277.5 million, says Jane DuBose, HealthLeaders-InterStudy analyst. "That's a 6.8% profit margin." All of the state's HMOs were in the black in 2004, although UnitedHealthcare and Aetna Inc., two other national insurers, had lower net income than in 2003, DuBose says.Source: Decision Resources Inc.

The Lawson Firm, a Cleveland-based law firm providing legal services to the insurance industry, is offering a two-part paper examining the business and legal risks associated with business-process outsourcing (BPO) and the strategies used to manage those risks. The paper is in response to recent studies showing that roughly half of all insurers currently outsource one or more business processes, or are planning to do so within the next 18 months.

COLUMBUS, Ohio--Nationwide Financial Services, Inc., a leading provider of long-term savings and retirement products, today reported first quarter 2005 net income of $160.5 million, or $1.05 per diluted share, compared with first quarter 2004 net income of $119.6 million, or $0.78 per diluted share.

Insurance revenue reported to the Federal Reserve by the nation's bank holding companies grew by $7.3 billion in 2004 to $40.8 billion, 22% higher than 2003, according to an analysis by the American Bankers Insurance Association (ABIA), Washington, D.C.

The National Association of Insurance Commissioners (NAIC) May 2 launched pilot project with five states to store electronic fingerprints of licensed insurance producers.

Quincy, Mass.--eStudentInsurance.com, a service of the Edvisors Network announced this month a new partnership with Worldwide Insurance Services. The Edvisors Network, a multi-national education services company, teamed up with Worldwide Insurance Services, a global leader in travel insurance, to create a new insurance policy for students traveling anywhere in the world. Global Student Health plans from eStudentInsurance.com are designed specifically to benefit international and domestic students by offering optimal affordable coverage, anywhere in the world.

Moncton, N.B. Canada--Whitehill Technologies Inc., a provider of document composition and data transformation software, has acquired the technology assets of Metaserver Inc. With this deal, Whitehill now owns the patented technology platform behind Metaserver's suite of business process integration (BPI) software and solutions for the insurance industry.

With industry research indicating that many individuals don't understand their annuity and life insurance needs, the responsibility falls on insurers to provide product research and needs-analysis to customers.While meeting with a financial advisor is one way to educate customers, many carriers, such as New York Life, are enhancing their Web capabilities to reach customers directly. And their efforts are being noticed.

In a move to strengthen the services it provides to sponsors of defined contribution plans such as 401(k) plans, Nationwide Financial Services Inc. in April purchased a company that provides third-party money management services to plan participants.The company, Registered Investment Advisors Services Inc. (RIA), which is based in Dallas, has been providing investment management services since June 2002 to plans that are part of Nationwide's Best of America Group Pension Series programs. Based on that experience, Nationwide executives say tighter integration with RIA Services will provide plan participants with expert advice on how to manage their retirement funds, and it will enable Nationwide to expand these services to other plans.

Industry experts often criticize insurers as being "laggards" in adopting new technologies. But carriers are leading most other industries when it comes to adopting scanning and imaging technologies, a new study concludes.For example, 86% of insurers surveyed by AIIM, an enterprise content management association based in Silver Spring, Md., are using scanned documents and images to answer inquiries from customers, compared with 73% of companies across all industries. Furthermore, 60% of carriers use scanned documents to respond to litigation, compared with 45% of all survey respondents.

The Contracts Update section includes announcements of contracts insurance information technology companies have signed with customers in recent weeks. Contract news can be faxed to Insurance Networking News magazine at (312) 913-1366 or by electronic mail to Stephen.Dwyer sourcemedia.com Apres Systems Inc.

At Erie Insurance Group, the foundation for fighting fraud is a business strategy that defines objectives, quantifiable goals, and tactical and operational plans: What is the company trying to accomplish? Does the company have enough resources to react to instances of fraud? How is Erie going to get better referrals to its special investigations unit and become more proactive in identifying fraud?"Erie is keenly aware that our experienced people-our claims adjusters, field investigators, intelligence analysts and information specialist-coupled with our use of fraud detection technology and investigation tools, have made our anti-fraud program so successful," says David Rioux, assistant vice president and manager, corporate security and investigative services for Erie Insurance Group, Erie, Pa.

IVANS STUDY REVEALS SECURITY CONCERNS FOR AGENTSInternet security is a major concern for independent agents, according to a recent survey by IVANS Inc., Old Greenwich, Conn. A full 80% of agents are most worried about viruses and worms, and 42% said hackers are their second-biggest worry. The survey also revealed that 100% of respondents currently use an agency management system. In a November 2003 survey, 86% used an agency management system. In addition, 76% of this year's respondents prefer to retrieve carrier information through their agency management systems, versus 52% in 2003. Only 10% of agents prefer to retrieve data through carrier Web sites, while 8% prefer to receive information via paper.

Life Settlement Insights has launched what the company claims is the life insurance settlement industry's first online exchange. Called LifeX (www.life-x.com) institutional buyers will be able to electronically submit bids for an individual's unneeded life insurance policy in an open-forward auction format.

U.S. property/casualty insurers are expected to pay homeowners and businesses an estimated $2.1 billion for insured property-loss claims from eight catastrophes in the first quarter, according to preliminary estimates by ISO's Property Claim Services (PCS) unit.

RLI Corp. a Peroia, Ill.-based provider of property/casualty insurance and surety bonds that targets underserved markets, has established a strategic information services department to manage and develop RLI's strategic and management information services. The company has also named Iqbal "Q" Shariff to serve as vice president of the new department.