LIBERTY SUES ASPEN
Liberty Mutual Group Inc. filed suit against Hamilton, Bermuda-based Aspen Insurance Holdings Ltd., several Aspen subsidiaries and a number of Liberty Mutual's own former employees, charging they conspired to steal Liberty Mutual's professional liability business. In a suit filed in New York State Supreme Court, Boston-based Liberty Mutual said nine former employees who left Liberty Mutual to join Aspen "breached their duties of loyalty by helping Aspen steal from Liberty the infrastructure necessary to run a successful professional liability insurance operation in direct competition with Liberty." The suit seeks compensatory and punitive damages.
Two freshmen representatives in February planned to introduce a bill to repeal the McCarran-Ferguson Act's limited antitrust exemption for health insurers and medical-malpractice liability insurers. Reps. Tom Perriello, D-Va., and Betsy Markey, D-Colo., said the bill was necessary "to end special treatment for the insurance industry that allows them to fix prices, collude with each other and set their own markets without fear of being investigated." Insurance industry groups oppose such legislation.
DB OUTPERFORMS 401(K)
Defined-benefit pension plans are consistently earning higher rates of return than 401(k) plans, according to an analysis released in February. The median annual rate of return for defined-benefit plans averaged 10.13 percent compared with 9.06 percent for 401(k) plans from 1995 through 2007, according to consulting firm Towers Watson. "Even with investment education and better default investment options for 401(k) plan participants, defined contribution plans do not replicate all the advantages of defined-benefit plans and are unlikely to outperform defined-benefit plans, which generally have extended investment horizons and economies of scale," said Mark Warshawsky, Towers Watson's director of retirement research in Arlington, Va., in a statement.
RIMS OPPOSES TRIA CHANGE
The New York-based Risk & Insurance Management Society Inc. "strongly" opposes provisions in the Obama administration's budget proposal scaling back the federal terrorism insurance backstop program, said Scott Clark, RIMS secretary and director of the external affairs committee. The administration calls for increasing deductibles and copays for insurers that participate in the program, as well as eliminating coverage for acts of domestic terrorism, actions the White House says will save $250 million.
NAIC ARGUES ON AIG
State regulators have told Congress the Treasury's assessment of how American International Group holding company problems could have impacted AIG's ability to pay insurance claims is wrong. In a letter to lawmakers, the National Association of Insurance Commissioners said that American International Group's difficulties at holding company levels would not have prevented AIG insurance subsidiaries from making good on claims. Moreover, the letter said, AIG's problems are no reason to "justify a new federal bureaucracy" through creation of an optional federal insurance charter.
LLOYD'S LAUNCHES PLAN
Lloyd's announced its 2010-2012 plan. A fundamental part of it will remain the corporation's role in overseeing the performance of its market participants. In the longer view, the plan calls on the London market to promote the overall competitiveness of London as a financial center, and to help manage the implementation of Solvency II.
--Compiled by staff from news and wire reports.
March 1, 2010
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