Policy adminstration

Andover, Mass. - CGI's special investigative unit (SIU) operating within Clarendon National Insurance Co. has concluded a probe that resulted in the arrest of four California residents. Six felony charges have been lodged in connection with a fraudulent auto theft claim that was filed with Clarendon.On March 1, 2006, California Insurance Commissioner John Garamendi announced the arrests and added: "These types of false claims cost all of us more in the form of higher insurance premiums. My department will continue to fight this fraud to help ensure a fair, affordable insurance system for all Californians."

Washington, D.C. - United States Senators John Sununu (R-N.H.) and Tim Johnson (D-S.D.) have introduced the "National Insurance Act of 2006," legislation that would allow life and property/casualty insurers to choose federal rather than state charters under an "optional federal charter" regulatory system.Sununu and Johnson, both members of the Senate Committee on Banking, Housing, and Urban Affairs, introduced the legislation on Wednesday, April 5. The measure has been referred to the Banking Committee where hearings are expected later this spring.

Santa Clara, Calif. - Itemfield, a provider of complex data transformation software, has formed a relationship with Adobe Systems Inc. to work together to develop a solution designed specifically for the insurance industry.The combination of Adobe's intelligent forms that support the ACORD XML data standard with the process-specific business rules and complex data transformation capabilities from Itemfield can help insurers increase efficiency by accelerating the processing of transactional data in electronic forms, such as quotations and new business submissions, according to the two companies.

Seattle - Safeco has named William Jenks chief information officer, effective April 17, 2006.Jenks most recently served as executive vice president and chief information officer of worldwide operations at Publicis Groupe, one of the world's largest advertising and media companies. At Publicis, Jenks led the consolidation of separate technology platforms following a major corporate acquisition. He also realigned the company's technical resources to support top-line business objectives and improve the efficiency of its global workforce.

New York - Lexington Insurance Co., a member company of American International Group, Inc. (AIG), has launced a new online site, www.lexaehelp.com, to provide relevant information to professionals carrying architects and engineers (A&E) liability insurance. The new Web site was created to provide insureds with access to ongoing education modules, contractual information and legal information resources."Because of the specialized liability concerns of architects and engineers, we created www.lexaehelp.com to give our A&E insureds resources specific to their field--including online classes that satisfy state requirements--to assist in mitigating risks and liabilities," says Kevin Kelley, CEO, Lexington Insurance Co.

Las Vegas - Recognizing the growing role of enterprise systems in assisting companies to meet the increasing challenges of corporate compliance and risk management, SAP AG is acquiring Virsa Systems Inc., a privately-held supplier of cross-enterprise compliance solutions. The announcement was made at Simplify, the 2006 Virsa Customer Conference, being held in Las Vegas.Founded in 1996, Virsa has more than 300 enterprise customers, many of which are global 1000 companies, across all major vertical market segments. SAP stated that the transaction with Virsa is continuing evidence of its strategy to use "fill-in" acquisitions to add to its broad solution offering by gaining specific technologies and capabilities that meet the needs of its customers, within industries or across industries, while maintaining its successful organic growth track record. Terms of the all-cash transaction were not disclosed.

Gilsbar Inc. has had a detailed disaster recovery and business continuity plan in place since 1996. The New Orleans-based third-party administrator, which handles claims for about 150,000 members, employs a certified disaster recovery specialist. And, the company's executives and technical staff go through tabletop disaster recovery scenarios at least twice a year.Like many other insurance companies, Gilsbar is prepared for catastrophes. However, when Hurricane Katrina hit last year, insurance executives were caught by surprise and had to act on their feet and respond to a bevy of unexpected circumstances.

He ain't no Oprah; but he's definitely a force to reckon with. At Aflac, at least, he's the senior vice president and CIO-and, like Oprah, he likes books. In fact, Gerald Shields likes books so much he established a lunchtime book club several years ago for his entire IT leadership team. Every week, some 50 or so Aflac IT executives, directors and managers attend the one-and-a-half-hour meeting."It's more than just a book club," says Shields. "It's a way for me to invest in our people." Shields has been CIO at Aflac since last July. And, before that, since 2002, he was vice president, information technology-enterprise services at the Columbus, Ga.-based insurer best known for its lovable quacking duck.

The "whys" of data access management are as far-reaching as the technology used to manage it.According to New York-based Ernst & Young LLC, regulatory compliance is the No. 1 driver of insurance industry information security. However, the devastating consequences of other incidents, from breaches to simple human error, can't be dismissed.

In a sign of the major benefits to be won by insurance firms that accentuate Web-based and electronic solutions, the Blue Bell, Pa.-based insurer PMA Insurance Group received superlative ratings in customer service in a recent survey conducted by an independent researcher.In the survey, J.P. Murphy and Co., a Malvern, Pa.-based marketing and opinion research firm, asked approximately 500 of PMA's active clients about the quality of customer service that the insurer offered in areas including claims processing, risk assessment, risk management and cost control.

Despite reeling from the worst year in history for claims losses, pundits say the insurance industry plans to increase its spending on claims technology in 2006. For some, the idea of stepping up to new technology sounds like the perfect way to address inefficiencies that continue to plague claims processing. To others, it's yet another Band-Aid that may or may not be effective in solving what has become a hushed, off-the-record issue: claims leakage."Claims leakage is the difference between what you spent on a claim and what you should have spent," says one East Coast health insurance claims executive, who, like many sources interviewed for this story, asked to remain anonymous.

According to the coalition Against Insurance Fraud, insurance fraud is an $80-billion crime wave. Unfortunately, most insurance carriers have neither the processes nor technology they need to stop fraud.Even so, as fraud schemes become more sophisticated, insurance carriers must examine an even wider array of data to identify fraud trends and detect fraudulent claims. To do this, they must institute a set of technology best practices and techniques to automatically detect fraud and abuse early in the claims process.

Seoul, Korea - In what is being called the largest deal of its kind for the financial services industry in Korea, Kyobo Life Insurance has contracted IBM to operate and manage its IT infrastructure.Under the terms of the 10-year agreement which has a total contract value of approximately 340 million U.S. dollars, IBM will provide IT strategy consulting services to help develop and advance Kyobo's IT vision and strategy. IBM will also manage the company's servers, storage systems, network and desktop computers and operate its data and disaster recovery centers. Additionally, IBM will provide IT skills development and IT management training services, called 'IT University', for Kyobo's employees.

Washington - The American Academy of Actuaries disclosed that a future large terrorist attack in New York City could result in $778 billion in insured losses.Speaking at the National Association of Insurance Commissioners (NAIC) public hearing on "Terrorism Insurance Matters," Michael McCarter, chairperson of the Academy Terrorism Risk Insurance Subgroup, provided potential property/casualty, and group life insurance losses as a result of various types of terrorist attacks. His group estimated potential insured losses from a conventional truck bomb terrorist attack, as well as medium and large chemical, nuclear, biological or radiological (CNBR) events caused by terrorism.

Bowling Green, Ohio - Sky Financial Group Inc. has hired Zahid Afzal as executive vice president/chief technology officer. He will report directly to Les Starr, corporate executive vice president of technology and operations.Afzal comes to Sky from Bank of America, where he was a senior vice president and chief information officer of the consumer banking division. While at Bank of America, Afzal directed the consumer banking information technology initiatives and successfully implemented several programs, which reduced expenses while growing the business organically and through mergers and acquisitions. Prior to Bank of America, Afzal was the chief information officer for Broadslate Networks and a senior technology executive for Citicorp.

New York and Emeryville, Calif. - After the completion of a successful 18-month pilot, Empire Blue Cross Blue Shield and RelayHealth Corp. are expanding the RelayHealth webVisit service to all members of Empire's HMO plan.Beginning July 1, 2006 more than 400,000 HMO members will have access to RelayHealth's Web-enabled doctor visits. As part of the expansion agreement, Empire will also make RelayHealth available to all of its national Administrative Services Only (ASO) accounts as a new benefit.

Chicago - The U.S. property/casualty insurance industry will report deterioration in profitability in 2005 because insured catastrophe losses reached record levels in 2005, according to Fitch Ratings.The decrease in profitability is largely due to the destruction from Hurricane Katrina, the most devastating insured loss event in history, and Hurricanes Rita and Wilma, each of which will rank among the top 10 historical insured loss events.

New York City - The National Association of Insurance Commissioners (NAIC) has launched a comprehensive public education program to assist consumers with information about insurance issues.Under the banner of "Insure U," the campaign has two objectives: to help consumers get smart about insurance as their needs change at different life stages, and to educate them about how to avoid being scammed by fake insurance companies. The program includes an online education site and public service announcements in English and Spanish.

Okemos, Mich. - Sircon Corp. and Efficient Forms LLC, Littleton, Colo., have formed an exclusive partnership designed to build on each other's products and customer bases to create an online platform for agent hiring, contracting and licensing for insurance agents, carriers and regulators. The partnership is a step toward creating a single online community where insurance carriers and their distribution partners can collaborate through an integrated, coordinated network, according to the two companies."This combination provides online capabilities that can transform processes between insurance carriers and their distributors," says Gary Gummig, vice president of business development at Sircon. "By integrating online services that will automate transactions and workflow, and virtually eliminate paperwork, this creates opportunity for unprecedented process breakthroughs."

Bettendorf, Iowa and Edison, N.J. - Fraud Resource Group, a business, insurance and identity fraud investigative and consulting firm, is using StrikeForce Technologies' products to launch a Web-based identity validation and authentication service, called the Trusted Customer program, which is designed to help prevent fraudsters from setting up fraudulent accounts and stealing high-value vehicles, goods and rental equipment.Construction equipment theft is a $1 billion annual problem, according to the National Insurance Crime Bureau, and only 10% to 15% of stolen equipment is ever recovered, according to the National Equipment Register. Fraudsters, posing as customers and contractors, use false credentials and stolen credit card data to "rent" vehicles, tools, and construction equipment. The rental stores lose equipment and potential income until a replacement arrives, and the legitimate credit card holder is left to dispute the charge.