Policy adminstration

Westlake Village, Calif. - The Hartford Financial Services Group Inc. has been recognized for call center operation customer satisfaction excellence under the J.D. Power and Associates Certified Call Center Program. The Hartford property and casualty sales and service centers are the first in the insurance industry to be certified under the program.Through its direct personal lines business, the Hartford, Conn.-based carrier handled more than 10,000,000 telephone, e-mail and fax interactions in 2004 from its call centers in Southington, Conn., Allentown, Pa., Santee, Calif., and Oklahoma City.

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.

Washington, D.C. - The U.S. House of Representatives on Wednesday passed a bill extending a federal program that guarantees the government's support of some losses from terrorist attacks, a measure that insurers and property owners call critical to the economy.

Stamford, Ct. - The lack of IT budget and resources, and perceived higher priorities for spending elsewhere will no longer be a barrier for P & C carriers making major investments in claims technologies, according to a report released today from Gartner, a Stamford, Ct. research firm. In fact, tight profit margins and high operational costs, as well as consumer demands for quality service, are now driving insurers to address these problems, says the report's author, Kimberly Harris-Ferrante, who predicts that claims technology and process improvement projects will increase by more than 20 percent in 2006 among P&C insurers.

Chicago - Blue Cross Blue Shield's vision for rounding out its consumer-driven products initiative took a giant leap forward today with the announcement of a new bank to help BCBS companies provide its customers with more technical tools and greater financial options to manage how they direct their healthcare spending.

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.

Creating economic value from distribution has never been more difficult for life insurers trying to increase business and reduce costs. Balancing the complexities inherent in a competitive marketplace, more than 1,000 U.S. companies currently offering a host of life and annuity products are in a scramble to hold on to representatives from traditional channels and acquire those from nontraditional channels.In the face of a growing market (Baby Boomers looking at retirement strategies now count 77 million), Internet-based customer self-service and a host of alternative distribution channels, keeping traditional, dedicated life insurance sellers on board is no easy task. The number of career life agents dropped to 178,000 in 2000 compared to 238,000 a decade ago, reports TowerGroup, a Needham, Mass., research and advisory firm.

Talk concerning the benefits that Web services can bring to the insurance industry has run rampant during the past few years. But talk is cheap-and Web services, on the other hand, can be expensive. That leaves one perplexing question: When will carriers actually let go of the purse strings and invest in this promising technology?Certainly, all the chatter about Web services should make insurance companies interested in-or at the very least curious about-the vast potential that the technology holds. Based on open, standard protocols, primarily XML, Web services expose an application or data on one computer to requests from other computers without using proprietary interface languages.

They began in the late 1990s as personal Web sites for hobbyist-authors to climb on their soapboxes, voice their opinions and reveal their daily activities to the whole wide world. Today, there are more than 17 million "blogs"-short for weblogs-and they're making their way into the business world, including the world of insurance."Weblogs have such a strong appeal to Web users," says Julie Ferguson, a communications consultant for Lynch, Ryan & Associates, a Westborough, Mass.-based workers' compensation consulting firm. "They're an important source of information, and if companies do them right, they speak with a more authentic voice than other forms of communication."

How important is your distribution network? Is it the lifeline of your business? What if your distribution network was a finely tuned machine, cranking out more business than capacity allows? As seen in our cover story, carriers agree that technology is the key to solving many distribution dilemmas. In another article in this issue (page 20), we learn that they're not all that excited about investing in technology that enables agents to leverage single-entry, multiple carrier interface (SEMCI) technology. It may depend who you ask, but few would disagree that technology plays a critical role in independent agents' ability to help carriers realize success-across all lines.So, who is ultimately responsible for making sure that happens? In a recent Insurance Networking News virtual trade show, available on the INN Web site, we posed that question to Jeff Yates, executive director of the Agents' Council for Technology for the Independent Insurance Agents & Brokers of America, a national alliance of 300,000 business owners and their employees.

Since 2000, when the Gramm-Leach-Bliley bill made it possible for banks to enter the insurance business, the selling world has seen an invasion of financial institutions, such as Wachovia and BB&T, who have bought insurance agencies or created their own to sell life, disability and other products.Now, the insurance industry seems to believe that turnabout is fair play. In addition to a number of insurance companies, including MetLife, State Farm and Allstate, that created their own banks several years ago, one firm, InBank, is going so far as to offer insurance companies "private-label banking," which executives say allows insurers to sell banking products without the attendant capital costs and regulatory responsibility.

In this age of Blackberries and instant messaging, insurance carriers and agents alike are focused on finding high-tech solutions to conduct their businesses. Enter: Single Entry Multiple Carrier Interface-also known as SEMCI.The concept of SEMCI technology sounds simple. Vendors create applications that enable independent insurance agents to access one site, hopefully through their own agency management system, enter data once and then communicate with multiple insurance carriers to obtain real-time quotes.

As wildfires scorched California's Los Angeles and Ventura counties in October, thousands of firefighters tried desperately to extinguish the flames that-fanned by dry winds-threatened to spread.Homeowners weren't the only ones following the spiraling fires with concern, as insurers, too, have seen how once seemingly safe urban areas are now vulnerable.

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).

The debate in the industry over an optional federal charter for insurance companies has been brewing for several years. But now, there are some numbers that attest to the value of a single federal regulator-at least for the life insurance sector.More than $250 million, or 55% of all regulatory costs, are directly related to addressing the requirements of multiple regulatory jurisdictions, according to a recent study conducted by the American Council of Life Insurers (ACLI), Washington, D.C., and El Segundo, Calif.-based Computer Sciences Corp. (CSC). A majority of respondents to the ACLI/CSC survey indicated their companies had lost premium (73%) and deferred or shelved products (83%) as a result of delays in the state-by-state approval process. What's more, nearly every aspect of a life insurer's delivery system is affected by regulatory costs-from designing new products to paying claims.

Few P&C carriers are satisfied with their existing policy administration systems. But while most would like to benefit from modern technology solutions, getting there can be a daunting challenge.Developed using now-ancient languages like COBOL and first deployed 15-20 years ago, many insurers' policy administration systems (PAS) lag far behind today's technology. Yet, the PAS is literally the life support system of an insurance carrier's business.

Washington, D. C. - Health insurance plans are advancing information technology (IT) on many fronts, and in the process are achieving impressive results in health care quality, service, cost, and efficiency, according to a report issued by America's Health Insurance Plans (AHIP), a Washington, D.C., national trade association. "Innovations in Health Information Technology" profiles more than 40 innovations in the use of health IT that address a variety of healthcare system needs with effective new solutions.

Kansas City, Mo. - Representatives of the Financial Crimes Enforcement Network (FinCEN) of the United States Department of Treasury will be attending the National Association of Insurance Commissioners (NAIC) Winter National Meeting in Chicago during the Antifraud Task Force meeting on Monday, December 5, to present two final rules that will affect certain insurance companies.

New York - CIGNA Inc. is expanding its on-line pricing data for consumers, the company reports.