A View from the Press Box

Three finalists have been chosen in the inaugural “National Underwriter Award For Excellence In Workers’ Compensation Risk Management”–a program sponsored by the National Council On Compensation Insurance. Click on to find out the indentities of the winners, and for more information about the award and NU’s conference program.

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Insurance officials are bending over backwards to dampen any enthusiasm about industry-wide first-quarter results, but the truth is that despite a softening market and tenuous investment climate, profits are still flowing in at an impressive rate, no matter what carriers say about relative rates of return.

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In my May 4 blog entry, I asked you all to weigh in on NU’s latest “Question Of Ethics,” having to do with the ethics of using credit scores in underwriting and pricing. You responded in droves on this hot topic! Click on to read the column by Peter R. Kensicki, professor of insurance at Eastern Kentucky University, as well as a member of the Ethics Committee of the CPCU Society, who boiled down all the comments into a coherent summary for NU’s July 2 print edition. Also, feel free to add your opinions right here on the blog.

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Many insurers–perhaps too eager for a long-term extension of the federal reinsurance backstop provided by the Terrorism Risk Insurance Act–have signed off on a proposal in Congress to force the industry to cover not only “conventional” events (if you could call flying jets into buildings “conventional”), but potentially far more devastating nuclear, biological, chemical and radiological attacks as well. I think that’s a huge mistake, both philosophically and economically.

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Although President George W. Bush’s representative made it clear today that he does not want to see the federal reinsurance backstop provided by the expiring Terrorism Risk Insurance Act extended for a decade, let alone made permanent, I say he wouldn’t dare veto a long-term extension bill if push came to shove.

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Insurers have taken a beating in Congress and the press for allegedly dumping claims involving properties damaged in Hurricane Katrina on the National Flood Insurance Program, which in fact might have been wind-related and should have been paid by private homeowners carriers. While two federal investigations failed to come up with any evidence supporting such charges, one insurer testifying on Capitol Hill offered a solution that might make the point moot in future storms. I am curious what you make of it.

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On my blog entry of May 25, I asked you to share with us your war stories about the wildest and most challenging claims you had come across. NU’s Matt Brady did some digging of his own, and put together a good compilation of a number of weird cases indeed. We illustrated a few of the tamer incidents with appropriate art–such as a man sitting atop a giant egg to dramatize a battle over liability coverage for a fertility center mix-up. But I decided to leave it up to your own imagination when it came to a rather racy recollection that closed the article. Click here to enjoy the complete account, and feel free to add more such stories to this blog by clicking on “Comments” below.

New York Insurance Superintendent Eric Dinallo crossed the Hudson to visit with NU’s editors in our Hoboken office this past Monday to lay out his vision for supervising this industry as well as modernizing the broader financial services sector. You can read all about it by clicking here. However, the new commish also set me straight about his role–and that of his former and current boss, Gov. Eliot Spitzer–in settling $2 billion in leftover World Trade Center claims.

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Concerns about broker compensation have not escaped the attention of public-sector risk managers, who fear being cheated out of taxpayer money. However, the question is whether buyers–in the public or private-sector–are up to the job of monitoring their intermediaries’ conflicts. Our own Caroline McDonald got an earful on the controversy this week from the outgoing president of the Public Risk Management Association, Katherine M. Peeling.

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Would homeowners hammered by Hurricane Katrina have fared better with insurers had their carriers been regulated by Uncle Sam? That was the real question driving a panel discussion last Friday in Washington, D.C., that included two carrier associations on opposite sides of the divide, cosponsored by the Competitive Enterprise Institute.

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