MMC EXECS INDICTED
Eight former Marsh Inc. executives have been indicted for their roles in the alleged bid-rigging scheme at the world's largest insurance brokerage. The former Marsh managers are accused of colluding with insurance executives to arrange noncompetitive bids and then conveying these bids to clients under false pretenses. The indicted executives include: William Gilman, former managing director and executive marketing director; Joseph Peiser, former managing director and head of global broking excess casualty; Edward J. McNenney, former managing director and global placement director; Greg J. Doherty, former senior vice president and ACE local broking coordinator team leader; and Thomas T. Green Jr., a former senior vice president.
TO AXE PLAN
Even if Congress approves legislation giving commercial airlines pension funding relief, Delta Air Lines Inc. may terminate its pension plans, resulting in a multibillion dollar loss that could be the biggest ever for Pension Benefit Guaranty Corp., the federal pension insurance agency. Delta filed for Chapter 11 bankruptcy on Sept. 14 and will not make its next required contribution to its pension plans. The Delta plans, which cover about 106,000 people, have $6.9 billion in assets and $17.5 billion in liabilities, according to PBGC. Based on preliminary estimates, PBGC says it would have to guarantee $8.4 billion of the $10.6 billion benefits-funding shortfall. The PBGC itself has a $23.3 billion deficit.
The National Alliance for Insurance Education & Research has established a Disaster Relief Scholarship Fund to assist those in the insurance community whose lives have been tragically altered by Hurricane Katrina. Scholarships to National Alliance programs will be given to qualified independent agents, brokers and employees in affected areas.
LOTS OF LAWSUITS
Doctors continue to be overwhelmed by frivolous lawsuits, according to updated Pennsylvania Medical Board statistics. According to the board, 7,725 Pennsylvania doctors were sued for alleged medical malpractice between May 22, 2002, and Aug. 26, 2005. Board statistics show that 3,016 Pennsylvania doctors were sued in fiscal 2004-05, up 44 percent from the previous year.
The Property Casualty Insurers Association of America expressed mixed emotions over Illinois Gov. Rod Blagoevich's signing into law medical-liability legislation. PCI is particularly concerned with the provision that would require hearings for rate approval before medical-liability carriers could change rates. PCI, however, supports the provision relating to caps on damages, which would set a limit of $1 million on pain-and-suffering awards (also called noneconomic damages) from hospitals and a $500,000 limit from doctors.
The Florida Office of Insurance Regulation has withdrawn its proposed state-specific requirements regarding the accounting treatment of finite reinsurance. Florida regulators have instead opted to implement the uniform standards that the National Association of Insurance Commissioners is in the process of adopting. This withdrawal appears to recognize that the NAIC is near final adoption of additional disclosures regarding finite reinsurance in the NAIC's annual statement, including a CEO and CFO attestation.
--Compiled by staff from news and wire reports
October 15, 2005
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