Risk & Insurance Online

AIG'S INSURERS SETTLE

American International Group Inc.'s insurers agreed to a settlement of claims former top executive Maurice "Hank" Greenberg deceived investors that provides $90 million for the company.

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Insurers covering AIG managers agreed to resolve claims that Greenberg, the former chief executive officer, and other executives used accounting tricks and fraudulent schemes to hide problems, according to a court filing in Delaware Chancery Court in Wilmington. The money is being paid to AIG and not investors, and another $60 million is going to Greenberg and other defendants to reimburse legal fees, the filing shows.

EARL: $50M IN LOSSES

Hurricane Earl caused an estimated $50 million to $150 million in insured losses to onshore properties in the Virgin Islands, St. Martin/St. Maarten and Puerto Rico, Boston-based catastrophe modeler AIR Worldwide Corp. said.

AIR said nearly half of the total is attributed to St. Martin/St. Maarten, where high winds downed trees and power lines and peeled off roofs and signage.

Meanwhile, Oakland, Calif.-based modeler EQECAT Inc. said in early September that Earl's expected track and intensity would cause less than $100 million in insured damage to North Carolina and Virginia.

PLAN FREEZES

Construction equipment maker Caterpillar Inc. is freezing its defined benefit pension plan for nonunion employees and sweetening its 401(k) plan.

Nonunion employees hired on or after Jan. 1, 2011, will not be eligible for the defined benefit plan. In addition, the effective date of the freeze for current employees will vary based on their age and when they were hired, a Caterpillar spokeswoman said.

However, Peoria, Ill.-based Caterpillar said it will continue to match 100 percent of nonunion employees' 401(k) plan contributions, up to the first 6 percent of pay.

MARSH WEIGHS IN

Discontinuation of a government-mandated terrorism backstop would have an adverse effect on the long-term availability and affordability of terrorism insurance, according to a letter submitted by Marsh to the president's Working Group on Financial Markets.

Marsh, along with Guy Carpenter, submitted the comments in response to a request for industry opinion on the availability and affordability of terrorism insurance. Marsh and Guy Carpenter are operating companies of Marsh & McLennan Companies Inc.

In the event that the Terrorism Risk Insurance Act (TRIA) is discontinued and not replaced by a similar government-sponsored program, Marsh anticipates that the availability of terrorism insurance would be greatly reduced in high-risk areas, such as business districts within major metropolitan areas. Marsh also anticipates that pricing for terrorism insurance would dramatically increase in these high-risk areas.

HHS LISTS APPROVALS

The Department of Health and Human Services' website lists the names of employers and organizations approved for partial reimbursement of early retiree health care claims under a $5 billion federal program.

The link, www.healthcare.gov/news/factsheets/ early_retiree_reinsurance_program.html, includes roughly 2,000 employers and other early retiree health care plan sponsors that had been approved.

--Compiled by staff from news and wire reports.

October 1, 2010

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