Posted by Admin | January 16, 2010

Senator questions severance for former AIG legal chief

In a Jan. 15 letter to the U.S. pay czar Kenneth Feinberg, Sen. Grassely cited recent media reports indicating that Anastasia Kelly will receive between $2.8 million and $3.8 million in severance following her resignation on Dec. 30, 2009.

Ms. Kelly—who was executive vp, general counsel, and senior regulatory and compliance officer for AIG—resigned at the end of the year in protest of the pay limits Mr. Feinberg last year imposed on AIG executives. In a statement earlier this month, AIG said Ms. Kelly resigned for “good reason” under the terms of AIG executive severance plan.

Sen. Grassely asked for several pieces of information, including Ms. Kelly’s salary history, the formula for the severance determination and a copy of AIG’s executive severance plan.

“The taxpayers are fed up with massive payouts to executives at companies that took taxpayer money,” Sen. Grassley wrote. Mr. Feinberg “should account for a multimillion-dollar severance agreement for this AIG executive,” he added.

A spokesman for AIG could not immediately be reached for comment.

For reprints of this story, please contact Lauren Melesio at 212-210-0707 or email lmelesio@crain.com

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Posted by Admin | January 16, 2010

Bar Insurance

Find Bar Insurance for taverns, night clubs and any other businesses that serve liquor.  Bar Insurance should start with a business owners policy to cover property and general liability.  When you speak with your bar insurance agent make sure that they understand the risks in your establishment.  Some of the key points to discuss include the use of bouncers, deep fat fryers on premise, dance floors and the types of recreational equipment in use.  Recreational equipment includes but is not limited to pool tables, dart boards, mechanical bulls and foam machines.  Call a bar insurance agent today at Commercial Insurance.NET to find a competitive quote.

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Posted by Admin | January 12, 2010

Geithner: Right to pay AIG counterparties at par

“Absolutely,” Mr. Geithner replied to a question from a CNBC television interviewer, though he specified that he had not been involved in a New York Federal Reserve bank decision for AIG to make the payments at par.

“We had no effective legal means to step in and prevent default (of AIG) … without helping this firm meet all its legal obligations,” he added.

For reprints of this story, please contact Lauren Melesio at 212-210-0707 or email lmelesio@crain.com

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Posted by Admin | January 11, 2010

Court sides with insurer in coverage exclusion case

Insurers and plaintiffs attorneys filed amicus briefs in the case of Tayarie Trayshaun Baker vs. National Interstate Insurance Co. et al. The case stems from an April 2001 bus collision that claimed the life of bus owner and driver La Shaun Clemmons.

In 2000, Ms. Clemmons purchased a bus from Four Winds Day Camp Inc., an Inglewood, Calif., bus company now called Four Winds Inc. Four Winds had coverage under a CGL policy issued by American National Fire Insurance Co. that included a widely used products and completed operations hazards exclusion, court records show.

Four Winds also contracted to inspect the bus it sold to Ms. Clemmons.

Following Ms. Clemmons’ death, her family, the Bakers, sued Four Winds, alleging wrongful death because of its alleged negligence in repairing, servicing and maintaining the bus.

A trial court ruled that Four Winds negligently inspected or maintained the bus and ordered it to pay more than $9 million. But the Baker family agreed not to execute the judgment in exchange for assignment of rights to Four Winds’ insurance coverage.

The insurer, however, had already declined to provide a defense and settle the case because Four Winds did not have products or completed operations coverage. The Baker family sued the insurer, alleging breach of good faith and contract because of its failure to settle the case.

A trial court denied the insurer’s motion for summary judgment, ruling the policy exclusion applied only to product liability-related claims, not to claims for negligent maintenance or inspection services. I

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Posted by Admin | January 06, 2010

Munich Re sees no big snow hit in Europe

“The storms and snowfall forecast for the weekend are not likely to cause major insured losses,” the world’s largest reinsurer said in a statement.

“Although snow breakage and heavy icing are being predicted, record events … are not to be expected,” the reinsurer’s weather experts predicted.

Heavy snowfall and snow pressure on buildings such as warehouses, shopping centers and infrastructure claimed four lives and caused around $1 billion in economic damage around Europe in February 2006, costing the insurance industry some $500 million in claims, company data showed.

Freezing high winds and snow at the turn of the year 1996-1997 killed 170 people and caused $650 million in insured damages.

Southwestern Europe and northern central Europe will be hardest hit this weekend, Munich Re said, as a strong low-pressure system called Daisy in southern Europe collides with a high-pressure system gaining strength over Scandinavia.

Snow and arctic winds are also blasting the United States and Canada, threatening crops and slowing business.

Toboggan sales in Germany have jumped in anticipation of the snowy weekend, while in Britain, which is also battling icy storms, sales of fur coats and thermal underwear are sharply up.

Reinsurers like Munich Re and Swiss Reinsurance Co. help shoulder the damage claims faced by insurers such as Allianz S.E., AXA S.A. and Assicurazioni Generali S.p.A.

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Posted by Admin | January 02, 2010

Ford takes on $7 billion in debt for retiree health VEBA

The VEBA trust was established as part of a sweeping 2007 agreement by Ford and other U.S. automakers to shift a combined $80 billion health care liability from their balance sheets.

In exchange for settling that debt, General Motors Co., Ford and Chrysler collectively pledged about $48 billion to the union-aligned trust fund, which would cover up to 675,000 retirees and dependents.

In 2009, as financial problems for the industry deepened, the UAW agreed to allow the three automakers to settle up to 50% of payments due to the VEBA in stock. Previously, all payments had been due in cash.

Ford said it opted to make a scheduled payment of $610 million to the VEBA in cash, instead of stock, on Dec. 31.

“We have removed a substantial health care liability from our balance sheet and have significantly reduced health care expenses,” Ford Chief Financial Officer Lewis Booth said in a statement.

“We also have shown confidence in our liquidity … by prepaying $500 million of debt owed to the VEBA trust.”

In completing its payout to the UAW fund, Ford gave the trust two secured notes worth $13.2 billion and transferred cash and other securities worth just over $4.1 billion.

The No. 2 U.S. automaker also transferred warrants to purchase 362 million shares of Ford common stock at a price of $9.20 to the VEBA.

With Ford shares trading near $10.20 on Monday, those warrants are in-the-money, and the UAW fund could opt to exercise the warrant at any time, a Ford spokesman said.

General Motors and Chrysler, which both went through U.S.

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Posted by Admin | December 27, 2009

Property/casualty sector recovering: Moody’s

The recovery in 2009 “follows a very poor year in 2008, and it occurred in spite of a weak pricing environment for all insurance products,” New York-based Moody’s said in a statement.

The rating agency cautioned, however, that significant challenges exist for the industry as it moves into 2010.

There is little evidence of a potential turn in the pricing cycle, so revenue declines are highly likely while investment volatility remains high “in light of the fragile state of the economy and capital markets,” Moody’s said in the statement.

The report, Deterioration in U.S. P&C Insurance Seen in Key Financial Ratios, is available at www.moodys.com.

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Posted by Admin | December 22, 2009

Senate passes broad health reform bill

“This is a victory for the American people,” Senate Democratic leader Harry Reid of Nevada told reporters afterward.

The vote clears the way for tough negotiations in January with the House of Representatives, which approved its own version on Nov. 7 that features different approaches on taxes, abortion and a proposed new government-run insurance program.

Once House-Senate negotiators agree on a single bill, each chamber must approve it again before sending it to Obama to sign into law. Democrats hope to finish work before Obama’s State of the Union address in late January.

“This fight is long from over,” said Republican Senate leader Mitch McConnell of Kentucky “My colleagues and I will work to stop this bill from becoming law.”

The Christmas Eve Senate session–the first since 1895–fulfilled a pledge by Sen. Reid to pass the bill before Christmas. Republican opponents delayed the final vote to the last day possible under Senate rules, but agreed to an early-morning vote to let people head home.

Senators called out their votes from their desk in a formal roll-call. Sen. Reid, who had been working around the clock for four weeks, mistakenly voted “no” when his name was first called before voting for the bill, prompting a roar of laughter in the chamber.

“This is for my friend Ted Kennedy,” 92-year-old Sen. Robert Byrd, D-W.Va., said as he voted “yes.” Sen.

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