PROPERTY/CASUALTY INSURERS ON GOVERNMENT RESCUE FUNDS: NO THANKS

No Byline. Insurance Journal. 2008/10/27. Following reports that the U.S Treasury is considering adding life, bond and mortgage insurance companies to its list of beneficiaries for some of the $700 billion federal bailout package, property/casualty insurers are making it clear to they don’t want any rescue dollars. Even if the government decides to make them eligible, the property/casualty insurers say they will refuse any funds. The American Insurance Association said it surveyed its board of directors and learned that “a substantial majority of the insurers represented by AIA do not support the inclusion of property/casualty insurers in Treasury’s Capital Purchase Program. If made available, they will not elect to participate.” The AIA represents 350 insurers that write more than $123 billion in premiums each year. AIA member companies offer all types of property – casualty insurance, including personal and commercial auto insurance, commercial property and liability coverage for small businesses, workers’ compensation, homeowners’ insurance, medical malpractice coverage, and product liability insurance. AIA members include ACE, Chubb, Farmers, The Hartford, Travelers, XL and Zurich among others. Evan Greenberg, chairman and CEO of ACE Group and chairman of the AIA, issued a statement as the U.S. Treasury Department deliberates on if it will include insurance companies under the Capital Purchase Program (CPP) that is part of the $700 billion emergency economic stabilization package approved by Congress.

The CPP was created to inject capital into credit markets and to prevent counterparty failure of such a magnitude as to pose a systemic risk to the financial system. Greenberg said that AIA members “believe that, as property/casualty insurance writers, they are well-capitalized and well-positioned to weather the current financial market crisis without the assistance of the CPP announced by Treasury. “As a result, the property/casualty insurers who are members of AIA strongly prefer to compete in the private market and the substantial majority will elect not to participate in the CPP,” the AIA chairman added.

Farmers Insurance Introduces Farmers Flex, A New Auto Package with Excellent Benefits: Offer Effective OCTOBER 1, 2007 to Many ARIZONA Farmers’ Customers and New Customers

LOS ANGELES — Wouldn’t it be great if you knew your insurance rates wouldn’t go up for three years, even if you had an accident? Farmers Ins. Co. of Arizona is introducing Farmers Flex(SM), a unique package of options that can reward drivers for being accident-free.

“Our research shows that our policyholders want the flexibility of being able to choose the exact auto coverages that will fit their individual or family needs,” explained Farmers President of Personal Lines, Kevin Kelso. “We packaged Farmers Flex(SM) coverages into three affordable options that are now available to many of our current and future customers in Arizona.”

Mr. Kelso explained the three options:

Plus

* Waives any accident surcharge for one chargeable accident for renewal offers during a three year term.

* Farmers 24 Hour HelpPoint Claims Service.

Premier

* Waives any accident surcharge for one chargeable accident for renewal offers during a three year term.

* Locks in your base rates for renewal offers during a two year term (and freezes your actual rates subject only to un-waived chargeable accidents and criteria changes, such as selling your vehicle or moving).

* Gives you a deductible for your Collision coverage that declines right away (on inception of the Package) and then declines again for every 12 months following that you have no chargeable accidents.

* Farmers 24 Hour HelpPoint Claims Service.

Ultimate

* Waives any accident surcharge for any number of chargeable accidents for renewal offers during a three year term.

* Locks in your base rates for renewal offers during a three year term (and freezes your actual rates subject only to criteria changes, such as selling your vehicle or moving).

* Gives you a deductible for both your Collision and Comprehensive coverages that declines right away (on inception of the Package) and then declines again for every 12 months following that you have no chargeable accidents.

* Farmers 24 Hour HelpPoint Claims Service.

“Farmers also offers a New Car Pledge with Farmers Flex(SM),” Mr. Kelso continued. “If, during the first 24 months or 24,000 miles of use, your new insured car is declared a total loss from a covered loss, Farmers will pay to replace it with a new one of the same make and model, with no depreciation. If your new car is repairable, we will use only original equipment manufacturer parts for the repairs, when they are available. Farmers agents throughout Arizona are available to explain the new Farmers Flex(SM) program.”

Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services, an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Farmers[R] is the nation’s third-largest Personal Lines Property & Casualty insurance group. Headquartered in Los Angeles and doing business in 41 states, the insurers comprising the Farmers Insurance Group of Companies provide Homeowners, Auto, Business, Life insurance and financial services to more than 10 million households. For more information about Farmers, visit our Web site at www.farmers.com

COPYRIGHT 2007 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning

Calling All New Arizona Parents, Farmers Insurance Will Soon Offer You a Discount on Auto Insurance

PHOENIX — Effective May 21, 2007, Farmers Insurance Group of Companies will recognize new parents in Arizona by offering a new parent discount auto insurance policy. The discount will be available to all existing Farmers’ new parent policyholders as well as new customers.

“Our research confirms a common observation: as a group, new parents are more careful drivers than other drivers of the same age,” explained Farmers Arizona State Executive Director Brian Braddock. “Given all the costs and challenges new parents face, we’re glad to be able to recognize that lower risk with an auto insurance discount. The discount can be as much as 5% and applies to families with children under the age of seven. Only one discount can be applied to each qualifying policy. A typical Arizona family can save $50 to $100 per year in this program.”

“Farmers is the first insurer in the country to offer new parent auto insurance discounts. We are constantly looking for innovative ways to help our customers manage their budgets better. What better way than to recognize responsible parents who live, work and drive in today’s fast paced society,” said Kevin Kelso, president of Farmers Personal Insurance. “Farmers insurance agents throughout Arizona are available to explain the benefits of the new parent discount policy and look forward to talking with existing and new Farmers customers.”

The Farmers Insurance Group[R] of Companies is the nation’s third largest insurer of autos and homes and helps to restore the lives of more than 15 million customers when the unexpected happens. Headquartered in Los Angeles, California, Farmers Insurance provides homeowners insurance, auto insurance, business insurance, insurance for recreational products, life insurance and financial services to more than 10 million households through a vast network of agents and district managers. For more information about Farmers, visit our web site at www.farmers.com.

COPYRIGHT 2007 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning

Farmers Insurance Companies Introducing Annual Auto Insurance Policy in Arizona

LOS ANGELES — Farmers Insurance Company of Arizona and Mid-Century Insurance Company, have good New Year news for their over 486,000 auto insurance policyholders and new customers in Arizona. Beginning December 18, 2006, the companies are offering a rare annual auto insurance policy that will allow Farmers auto insurance policyholders to choose a full-year auto policy rather than the commonly offered six month policy.

“The annual auto policy provides the same wide array of quality coverages and discounts available on the six-month policy, and does so at a premium rate that is ‘locked’ in for a full year,” explained Bill Martin, vice president of auto product management, Farmers Insurance Group of Companies.

“We are always looking for innovative ways to help our customers save time and manage their budgets better, two very important commodities in today’s busy world. We are offering our customers and new customers an annual auto policy that will save a lot of time and paperwork by eliminating the need to renew their auto policies every six months,” Martin said.

“Most auto insurance policies renew every six months. With Farmers’ annual auto policy, policyholders can lock in a low rate for a full 12 months, so they know exactly what their coverage will cost for the whole year,” Martin added. “Existing Farmers auto policyholders may choose to take the one-year policy at renewal time, or remain with a six-month policy.”

The more than 633 Arizona Farmers insurance agents will be contacting their customers soon to explain the benefits of the annual auto policy.

Farmers Insurance Group of Companies[R] is the nation’s third-largest Personal Lines Property & Casualty insurance group. Headquartered in Los Angeles and doing business in 41 states, the insurers comprising the Farmers Insurance Group of Companies provide Homeowners, Auto, Business, Life insurance and financial services to more than 10 million households through 17,000 exclusive and independent agents and district managers. For more information about Farmers, visit our Web site at www.farmers.com.

COPYRIGHT 2006 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning

Federal judge says commercial general liability policy didn’t cover

Danny Jacobs

A building contractor’s insurance policy does not cover the amounts an arbitrator awarded to a Sparks couple for faulty home construction, a federal judge has ruled.

Mutual Benefit Group, which issued the commercial general liability policy to Wise M. Bolt Co. Inc., successfully argued that the CGL did not cover the $115,000 arbitration award to Herbert and Elaine Tracey.

“The repair and replacement damages awarded as a result of Bolt’s poor performance are simply a cost of doing business, not a component of the insurance objective of shifting risk,” U.S. District Judge William M. Nickerson wrote in granting summary judgment for Mutual Benefit last week, ending a seven-year legal dispute.

William C. Parler Jr., Mutual Benefit’s attorney, said the decision provides guidance to insurers on contract-based damages awarded to builders on home construction projects. Previous rulings in state and federal courts had reached a similar conclusion for commercial projects, he said.

“If there are damages awarded based on a contractual obligation … then there will be no duty to indemnify,” said Parler, of Parler & Wobber LLP.

The Traceys are still living in their home on Thornton Mill Road, said their attorney, Douglas T. Sachse of Towson. Sachse declined to comment on Nickerson’s decision.

David B. Applefeld of Adelberg, Rudow, Dorf & Hendler LLC in Baltimore, who represented Bolt, also declined to comment. Court records indicate Bolt’s filings in the lawsuit were based on Mutual Benefit’s duty to defend and attorneys’ fees.

The Traceys entered a construction agreement with Bolt in October 1998, according to court records. The couple moved in seven months later even though construction was not completed.

The Traceys first sued Bolt for negligence and breach of contract in July 2001 in Baltimore County Circuit Court. Amended complaints were filed in 2002 and 2005 as more construction defects were found.

The complaints all alleged structural defects and code violations. The Traceys also blamed improperly installed windows, heating and cooling systems for “unexpected damage” to their furnishings and the food in their pantry, according to Nickerson’s memorandum.

The case went to arbitration in January 2007 before retired Judge Paul E. Alpert, who two months later awarded the Traceys more than $115,000 from Bolt, which was about $200,000 less than they had sought.

Alpert denied the couple’s motion for reconsideration in March 2007, a decision upheld by Judge Robert E. Cahill Jr. in circuit court in August 2007, according to court records. The judgment was recorded last March.

Mutual Benefit, meanwhile, had filed a complaint in federal court in December 2001 for declaratory judgment to determine if it had a duty to defend or indemnify Bolt. In October 2002, Senior District Judge Alexander Harvey II found Mutual Benefit had to defend Bolt, but stayed the indemnification and attorneys’ fees issues pending the outcome of the case in state court.

Nickerson administratively closed the federal case in August 2005 because of delays in the state case. The federal case was reopened in June 2006 at the request of Bolt, which was granted $34,000 in attorneys’ fees from Mutual Benefit that August, according to court records.

The Traceys requested the stay on the indemnification issue be lifted last November, a motion Nickerson granted in April.

Andrew H. Vance, a veteran construction lawyer not involved in the case, said Nickerson’s ruling last week is consistent with case law that excludes insurers from covering repair work done by a policy holder.

“This is what I’ve seen time and time again in the commercial realm,” said Vance, of counsel at Hodes, Pessin & Katz P.A. in Towson.

Copyright 2008 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.

Farmers Insurance Receives Approval to Acquire Zurich North America Commercial’s Small Business Solutions Book Renewal Rights

LOS ANGELES — Farmers Insurance Group([R]), the nation’s third-largest personal lines property and casualty insurance group, operating from Los Angeles since 1928, announced today that all regulatory approvals have been obtained for Truck Insurance Exchange (the “Exchange”), which is one of the Farmers Exchanges, to acquire the rights to access renewals on Zurich North America Commercial’s Small Business Solutions (SBS) book of business. In addition, the management of the SBS book of business will transfer to Farmers Group, Inc.

“We are pleased that we can now go forward with the integration of Farmers Business Insurance and Zurich Small Business Solutions,” said Paul N. Hopkins, chief executive officer of Farmers Group, Inc. “It will enhance the depth and breadth of products available to customers, create an enhanced distribution capability that competes even more effectively in both the exclusive agent and independent agent channels, and will benefit our entire organization.”

The SBS book consists of four primary lines of business: business owner’s policy (BOP) for property, general liability and umbrella, commercial auto and workers’ compensation — and is sold in 49 states plus the District of Columbia.

Although the management of the SBS book will shift to Farmers immediately, the full transition of the business to Farmers Business Insurance is estimated to occur within 18-to-24 months.

In the interim, Zurich companies that underwrite the SBS book and the Exchange will enter into a reinsurance arrangement, through which SBS premium will continue to be written on its current paper, but fully ceded to the Exchange. Other terms of the proposed transaction were not disclosed.

In 2007, Farmers Small Business Insurance unit produced $1.6 billion in gross written premium. This transaction will make the Exchange one of the top-five carriers in the U.S. small business market. The SBS book is estimated at approximately $700 million.

Mhayse Samalya, president of Farmers Business Insurance, added, “The economics of the small commercial business and the increasing level of sophistication and investment needed to do everything from predictive analytics, new product development, building state-of-the-art automation capabilities while at the same time continuing to implement processing efficiencies, makes winning in small commercial a game of scale.” Samalya added, “At $2.3B of small commercial, we now have that scale. Our goal is to leverage our size and substantial resources into a regional field based model that seeks to solve problems for agents.”

Mr. Samalya noted to better serve the thousands of Independent agents that currently offer SBS products, Farmers has appointed Carl N. Hackling as the new leader of the small commercial business distributed through independent agents. Samalya noted that Mr. Hackling will be field based and will immediately assume all responsibility for the distribution and underwriting of this business.

Jerry Carnahan, EVP of Exclusive Agency Field Operations, remarked, “This transaction will result in significant investments that will also help our Farmers Agents win with customer focused products and industry leading systems.” He further stated that the field-based strategy is perfectly suited to support our local agents that provide advice and service in the communities that we serve.

Farmers Group, Inc. is a wholly owned subsidiary of Zurich Financial Services, an insurance-based financial services provider with a global network of subsidiaries and offices in North America and Europe as well as in Asia Pacific, Latin America and other markets. Farmers([R]) is the nation’s third-largest Personal Lines Property & Casualty insurance group. Property and casualty products are underwritten and issued by the Farmers Insurance Exchange, Truck Insurance Exchange and Fire Insurance Exchange and their subsidiaries, which Farmers Group, Inc. manages but does not own. Headquartered in Los Angeles and doing business in 50 states, the Farmers insurers provide Homeowners, Auto, Business, Life insurance and financial services to more than 10 million households. For more information about Farmers, visit our Web site at www.farmers.com.

COPYRIGHT 2008 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning

AROUND THE COUNTY

Ryan, Kelly

Projects, developments and other activity in cities in and around OC

IRVINE

Construction crews are making progress on what’s billed as an environmentally friendly apartment complex near Jamboree Road and Main Street. Main Street Village, also known as the MetLife Apartments, is set to be Orange County’s first apartments certified for environmentally sound construction and building management techniques under the U.S. Green Building Council’s Leadership in Energy and Environmental Design standards. The developers hope to attract renters who value environmental practices. The real estate investments division of Metropolitan Life Insurance Co. has owned the 10-acre site since the 1980s. A single-story industrial building was demolished about four years ago. General contractor White Residential Inc. began building in spring 2007. White Residential is based in Kirkland, Wash., but has an Irvinc office. The complex has two pools, a 12,000-square-foot clubhouse, a 1.000-square-foot fitness center, a basketball court and a children’s playground. Main Street Village will have 481 apartments ranging from 640 square feet to 1,424 square feet. The entire complex is 500,000 square feet. The first of five construction phases should finish in January, with some residents moving Jn then. The final phase should be finished in late 2009. Project and construction management services are being done by Lincoln Property Co. in Irvine. Architects Orange is the architect.

NEWPORT BEACH

Anaheim Hills-based Bomel Construction Co. is building a parking structure for Hoag Memorial Hospital Presbyterian near Pacific Coast Highway and Newport Boulevard. The structure, designed by Parkitects in Irvine, has three levels and 771 parking spaces. Hoag Hospital had a building on the site that was demolished. The building was one of several that housed research and development as well as office space for the hospital. The remaining buildings on the site are being transformed into a new Hoag Health Center. The hospital has several health centers across OC, including in Irvine, Costa Mesa and Huntington Beach. The new center won’t open until the parking structure is complete, which could be as soon as the end of this year.

LACUNA NIGUEL

A Walgreens drugstore is nearing completion at Crown Valley and Alicia parkways. The building replaces a Farmer’s Market and Blockbuster. Demolition of that part of the Laguna Niguel Town Center began in January. The drugstore will span 13,000 square feet with the main entrance near Alicia Parkway. There also will be a second-floor mezzanine in the back for storage. Valencia-based Lundgren Management Corp. is overseeing construction, which should be done in September. Arizona-based Robert Kubicek Architects and Associates Inc. designed the building.

LOS ALAMITOS

A Precious Life Shelter for homeless pregnant women is going up near Katella Avenue and Los Alamitos Boulevard. Nonprofit HomeAid Orange County is developing the $880.000 project with several builders, contractors and suppliers. The 5,631-square-foot project calls for five apartments with 12 beds, a meeting room and childcare facility spread over two buildings. The apartments are outfitted with garages and laundry hookups. The shelter previously had two older houses on the property, which were demolished. There was a groundbreaking at the site in April and construction crews should be done in the fall. Irvine-based Empire Homes is the lead builder for the project. JZMK Partners in Irvine is the architect.

NEWPORT BEACH

The June 23 Around the County column should have said the builder of Newport Harbor High School’s multipurpose theater building is San Fernando-based Bernards.

If you’re a developer or city planner and would like to see a project featured in Around the County, please contact Kelly Ryan at ryan@ocbj.com or (949) 833-8373. The column covers projects in Orange County s cities and unincorporated areas, and some projects in Corona. Commercial, housing and retail projects are the focus of the column. Some larger public works projects also are included.

Copyright CBJ, L. P. Jul 7-Jul 13, 2008
Provided by ProQuest Information and Learning Company. All rights Reserved

CAP REIT Acquires North Toronto Apartment Complex

Canadian Apartment Properties Real Estate Investment Trust (“CAP REIT”) (TSX: CAR.UN) announced today that it has acquired two adjoining apartment properties located in North Toronto close to the Bayview Shopping Centre. The complex, consisting of 143 mid-tier suites, has easy access to Sheppard Avenue, Highway 401 and the subway line. The purchase price for the property was $14.0 million ($98,000 per suite) with a new CMHC insured mortgage of $10.8 million for a 5 year term at an interest rate of 4.69%. The balance of the purchase was funded from CAP REIT’s acquisition facility.

The property has had extensive retrofits to the roof, windows, balconies and heating system. In addition, the opportunity exists to enhance cash flow from the property as a number of existing rents are well below market. Occupancy currently is 98.6%.

“We are pleased to be completing our first acquisition for 2008, and remain committed to achieving our annual target of acquiring between 1,500 and 2,000 suites once again this year,” commented Thomas Schwartz, President and Chief Executive Officer.

As one of Canada’s largest residential landlords, CAP REIT is a growth oriented investment trust owning interests in 27,996 residential suites and two land lease communities comprising 1,233 land lease sites located in or near major urban centres from coast to coast. Since its Initial Public Offering in May 1997, CAP REIT has grown monthly distributions per Unit by 51%. For more information about CAP REIT, its business and its investment highlights, please refer to our web site at www.capreit.net .

Contacts: CAP REIT Mr. Michael Stein Chairman (416) 861-5788 CAP REIT Mr. Thomas Schwartz President & CEO (416) 861-9404 CAP REIT Mr. Yazdi Bharucha CFO & Secretary (416) 861-5771 Website: www.capreit.net

 

Workers compensation

Tim Carpenter Capital-Journal

Debate over bill becomes personal

Proposal would trim workers’ compensation benefits

Sen. Karin Brownlee supports relief for businesses

Sen. Karin Brownlee and Doug Allen sharply differed Wednesday on merits of proposed changes to the Kansas workers’ compensation law.

Brownlee, R-Olathe, supports a bill sponsored by the Kansas Chamber of Commerce that relieves companies of part of their financial obligation to employees hurt at work. Allen, of Spring Hill, takes a view that compensation for Kansans in job-related accidents — such as himself — should be expanded rather than trimmed.

This split at a public hearing of the Senate Commerce Committee was personal — they are brother and sister.

“Do not allow the interest of businesses and the insurance companies to mislead you to believe that their profits or costs are more important than the health and welfare of the people who entrusted their votes with you,” said Allen, who fell off a railroad car in 2005 and eventually turned to an attorney to secure medical treatment.

Brownlee said in an interview her sibling’s situation wouldn’t dissuade her from backing the bill.

“It’s extremely sad that the trial attorneys didn’t make sure that he got the health care he deserves,” she said.

Under the bill, the definition of “pre-existing” condition would be expanded for determining compensation for injuries and the definition of “work disability” would be narrowed for evaluation of benefits for career-ending injuries.

The Kansas Department of Labor reported 64,000 occupational injuries and illnesses in 2005, up 0.6 percent.

A Fort Hays State University report says weekly benefits for injured workers in Kansas are lowest among Kansas, Colorado, Missouri, Nebraska and Oklahoma. Kansas ranked sixth nationally in workers’ compensation insurance profitability in 2003, the report says.

Topeka lawyer Ronald Laskowski, testifying in support of the bill, said current law made it difficult for employers to get disability settlements that reflect an employee’s prior impairment.

“Employers are faced with nearly impossible evidentiary burdens and extensive litigation costs if they expect credit for a pre- existing condition,” he said.

Jeff Cooper, of the Kansas Trial Lawyers Association, said Kansas employers routinely receive credit for an employee’s prior injury.

“The testimony you have heard that employers are not getting credit for pre-existing impairment is flat simply wrong,” Cooper said.

Laskowski said work disability assessments in Kansas are based on a claimant’s ability to perform tasks corresponding to his or her previous 15 years of employment.

“A claimant is likely to exaggerate physical aspects of the essential job tasks to increase work disability,” he said.

Representatives of Kansas AFL-CIO, AARP Kansas and Kansas firefighters also objected to the bill.

Jim Lubbers, president of the Kansas State Firefighters Association, said half of Kansas’ firefighters were volunteers who rely on the workers compensation system if injured on the job.

“It will make it more difficult to recruit and retain the dedicated volunteer firefighters that Kansas so desperately needs,” he said.

Tim Carpenter can be reached at (785) 296-3005 or tim.carpenter@cjonline.com.

Copyright 2006
Provided by ProQuest Information and Learning Company. All rights Reserved

WGA Chosen Best Retail Insurance Broker

BOSTON, Aug. 25 /PRNewswire/ — William Gallagher Associates (WGA) has been named the 2008 Readers Choice Best Retail Agent/Broker by Business Insurance, the leading periodical to the commercial insurance industry.

Business Insurance’s Annual Readers Choice Awards recognizes the best overall commercial insurance industry companies and lets subscribers weigh in on which companies they think are the leaders in service, value, quality and innovation. WGA was ranked first among all brokers in the $25m-$50m revenue category.

“We have always been intensely focused on urgently delivering service to fast-growth companies with complicated risks, and each of our service teams are committed to being well-educated on the specific risks that face our core industries,” said Philip J. Edmundson, Chairman and CEO of WGA. “This is the culture that helped build WGA and continues to drive our business.”

Business Insurance is a weekly publication serving executives responsible for the purchase and administration of corporate insurance/self-insurance programs, encompassing both property and liability insurance and employee benefit programs, including life, health and pensions.

WGA is a leading provider of insurance brokerage, risk management and employee benefit services to companies with complex risks and dynamic needs, within industries that include: life sciences, technology, financial services, healthcare, aviation, energy and environmental services. The firm was founded in 1983 and is one of the country’s leading independent brokerage firms, with offices in Boston, MA; New York, NY; Hartford, CT; Columbia, MD; Princeton, NJ; Atlanta, GA; and Paris, France. http://www.wgains.com/

CONTACT: Susan Forbes, Marketing Director, Vice President of William Gallagher Associates, +1-617-261-6700, or +1-617-646-0282, direct, sforbes@WGAins.com

Web site: http://www.wgains.com/

COPYRIGHT 2008 PR Newswire Association LLC
COPYRIGHT 2008 Gale, Cengage Learning