Core systems

Rating agency demands (71%), financial reporting issues (55%), shifting product preferences (55%) and changes in regulatory requirements (48%) are driving the industry's need for improved risk and capital management practices, according to life insurance company CFOs surveyed by the Tillinghast business of New York-based Towers Perrin in its latest CFO survey.As a result of such pressures, 86% of the CFOs surveyed say they are paying more attention to risk and capital management practices. Four out of five (81%) of the executives polled are going one step further; they are proactively implementing them.

For years, life insurance providers and their agents have relied on obtuse, text-heavy sales presentations to their individual customers. Too often, though, poor sales presentation tools fail to enlighten individuals concerning the magnitude of a life purchase.

WASHINGTON-- Millions of Americans buying health insurance on their own have a wide variety of products from which to choose, and most select plans very similar to the coverage available to working people in employer-sponsored groups.

In a legal battle stemming from actions Allstate Insurance Co. took in 1999 to launch its groundbreaking multi-channel sales strategy, a federal judge has absolved the company of age discrimination. But Allstate is not off the hook yet.The judge's ruling also has cleared the way for terminated Allstate agents to sue the Northbrook, Ill.-based carrier under class-action status for other charges, including breach of contract, breach of fiduciary duties and violation of other federal laws, including the Employee Retirement Income Security Act (ERISA).

When it comes to inefficiencies surrounding information technology security practices, global corporations are discovering that to err is human.A survey conducted by Oakbrook Terrace, Ill.-based global trade association Computing Technology Industry Association (CompTIA) discovered that human error-defined mainly as a lack of adequate certification and training-is the root cause of lax IT security at most corporations.

The number of career agents-the largest distribution channel for life insurance-dropped significantly in a decade, down from 238,000 in 1990 to 178,000 in 2000. In addition, by 2010, 13.2% of the U.S. population will be 65 or older.These demographics present life insurers with product, distribution and operational challenges as fewer agents are available to sell new-sometimes complex-products to consumers who are planning for their retirement years.

Many corporations are catching flak these days for various operational inconsistencies.For instance, a recent survey indicates that companies, including insurers, have implemented seemingly effective, written IT security policies, but have not optimized these efforts by providing proper training and certification to its people.

Compromise legislation establishing a federal role in insurance regulation is likely to emerge from the House Financial Services Committee early in May. A hearing in late March yielded strong support for the measure from an industry divided on the issue.At the same time, the principles involved constitute the strongest support yet for greater uniformity in insurance regulation.

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 magazine at (312) 913-1366 or by electronic mail to Stephen.Dwyer thomsonmedia.com Computer Sciences Corp.

ST. PAUL, Minn. -- Through aggressive health care fraud investigations and coordination among other states' Blue Cross plans, the Blue Cross Special Investigations Unit (SIU) stopped payment on $8.7 million of suspect claims last year, reducing the impact of fraud on premiums in Minnesota.

MADISON, Wis. -- BlueCross BlueShield of South Carolina, a leading health insurance provider that also administers federal health insurance programs, has addressed its evolving document communication needs by designating two Esker Software solutions as enterprise standards. Esker DeliveryWare Platform and Esker Fax respectively provide BlueCross BlueShield with intelligent multi-channel e-document delivery and automated fax.

Nationwide Financial, Columbus, Ohio, is offering an online marketing tool to help investment professionals grow their businesses and support the long-term investment needs of their clients. Investment Selector is an online quarterly report that recommends investment options and percentage allocations for The BEST of AMERICA variable products. Investment Selector uses research and evaluation methods developed by Morningstar Associates LLC, a registered investment advisor and a wholly owned subsidiary of Morningstar Inc. Investment Selector targets the investments that fulfill five allocation models developed through a collaboration with Ibbotson Associates.

The majority of insurance companies already maintain a rigorous corporate governance model to protect the financial interests of their policyholders and shareholders. So why does the Sarbanes-Oxley act have the industry aflutter? New research from TowerGroup, a Needham, Mass.-based research and consulting firm, finds insurers are realizing that the law can serve as a catalyst for long- term financial systems architecture strategy and process improvements."The globalization of insurance and the current complex regulatory environment necessitate a systematic, integrated approach to risk management," says Cindy Saccocia, senior analyst in the Insurance practice at TowerGroup and author of the report, titled "Sarbanes-Oxley and Insurance: Requirements, Hype, and Opportunity."

Atlanta-based Blue Cross and Blue Shield of Georgia has launched the Clear Claim Connection, an online product and service for its network providers. This product, created by McKesson Corp., enables BCBSGa to share with network providers the auditing rules and clinical rationale which exist in the claims billing and auditing code system used by BCBSGa.John Watts, president and chief executive officer of BCBSGa, says, "This important service will enable network physicians and their office staffs to review our payment methodology online. By providing this service, we hope to make our reimbursement policies more readily accessible and reduce misunderstandings among providers, members and BCBSGa."

Prudential Financial Inc., Newark, N.J., has introduced an automatic, online licensing application for brokers seeking appointment to sell the company’s insurance and annuity products. The electronic data collection tool, called Online Confidential Data Sheet (CDS), was developed by BISYS Education and Licensing Services for Prudential.The Online CDS streamlines the traditional, paper-based appointment process and greatly improves brokers’ speed to market.

Risk Management Solutions Inc. (RMS), a Newark, Calif.-based provider of products and services for catastrophe risk management, has released the findings of an in-depth study that provides workers compensation, life, and health insurers with key benchmarks for the potential risk of human casualties from catastrophic events.Among other findings, the study demonstrates that while many in the insurance industry view the World Trade Center attack as a worst-case event, there are numerous natural and man-made events that could cause significantly higher casualties and associated insured losses.

NEW YORK--The Guardian Life Insurance Co. of America is making an effort to demystify the financial planning process and educate visitors on the role that Guardian's products and financial representatives play in an overall financial planning strategy. The company is doing it with a new Web site, located at www.GuardianLife.com. The new site replaces Guardian's existing Web address at www.glic.com.

In recognition of the HIPAA security rule pre-anniversary deadline that passed this month, Washington, D.C.-based nonprofit URAC released a report examining the state of preparedness in the health care industry in complying with the security rule.

Columbus, Ohio-based Nationwide Financial is using Web technology to make it easier for investment professionals to manage the client review process with a new tool called the Interactive Client Review (ICR).Nationwide's ICR tool simplifies the client review process by providing one-stop, real-time access to client portfolios online. Detailed information is presented in a concise and secure format for investment professionals to access from any remote location. The ICR tool can also provide investment professionals with a quick, easy view of their clients' quarterly statements online. Through its instantly accessible electronic format, ICR aims to help investment professionals manage their clients' accounts in half the time.

HARTFORD, Conn.-- Do automatic teller machines need specialized insurance? They sure do. Recognizing that midsize banks, credit unions, investment firms and insurance companies have a range of specialized insurance needs -- from property coverage for ATMs, foreclosed buildings and repossessed automobiles, to professional liability coverage for banks, investment advisors and insurance carriers--The Hartford Financial Services Group Inc. now offers a tailored package of coverages to address the specific exposures they are most likely to face.