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Reserving for mortgage insurance and title insurance in an economic downturn and amid a stressed real estate market can present challenges for insurers and actuaries, attendees at the Casualty Loss Reserve Seminar were told. Joseph Petrelli, ACAS, president, Demotech Inc, gave an overview of the title insurance and private mortgage insurance markets, explaining that each are distinct monoline markets. He noted that the peak year for the title insurance market was 2005, with $16.8 billion in direct written premiums countrywide that year, but through the first and second quarters of 2008 there had been a 15 to 20 percent decline… Read More »Economic Downturn Presents Challenges for Title, Mortgage Industry

California Gov. Arnold Schwarzenegger has approved legislation affecting indemnity for construction defect claims in contracts in residential construction — a decision that could increase litigation when resolving construction defect claims and could increase the defense limits needed in wrap-up policies. Read More

Managing expectations, showing empathy, ensuring convenient service and effective communication are key themes in enhancing overall insurance customer satisfaction with the claims process, according to the J.D. Power and Associates 2008 Auto Claims Satisfaction Study. The study measures the experiences of auto physical damage claimants by examining satisfaction with the claims process. Depending upon the complexity of a claim, the customer may experience all or only some of the following factors: claims settlement; service interaction; first notice of loss; repair process; and rental experience. The study finds that implementing 10 specific service practices has a considerable impact on overall satisfaction… Read More »Empathy, Communication Rank High in Auto Claims Satisfaction

The Federal Deposit Insurance Corp.’s powers could be expanded if Congress decides to shift insurance companies from state regulation to federal regulation, FDIC Chairman Sheila Bair said Wednesday. Bair said the FDIC could start providing guarantees for insurance companies, much like it already guarantees the deposits of most U.S. banks, if the insurance industry comes under federal regulation. Insurance companies are currently regulated by individual states.

San Mateo County Calif., has decided to sue executives at the bankrupt investment firm Lehman Brothers Holdings Inc., claiming they misled investors about the firm’s financial health. The Board of Supervisors agreed to retain the Burlingame, Calif., law firm Cotchett Pitre & McCarthy to move forward with the suit. The county’s $2.6 billion investment fund lost roughly $150 million when Lehman Brothers filed for bankruptcy. County Treasurer Lee Buffington says Lehman executives assured investors they had plenty of money just weeks before going bankrupt. County officials say they have already filed a claim in bankruptcy court for their portion of… Read More »San Mateo & Lehman Brothers

The family of a California man who died after he fractured his neck on Coney Island’s Cyclone roller-coaster has sued New York City. The musician’s relatives say the city failed to keep the eight-decade-old landmark ride safe. Keith Shirasawa took the wild ride on a July day in 2007, fracturing vertebrae on the first 85-foot drop. He died after complications from surgery. His family, which is suing in Manhattan federal court, says the city didn’t inspect the ride regularly. Lawyers for the amusement park blamed the accident on a malfunction that caused the Cyclone to drop too fast, and that… Read More »Man Died After Roller-Coaster Ride

November is the peak month for vehicle-deer collisions, and a new analysis of insurance claims and federal crash data indicate the problem is growing. The Highway Loss Data Institute (HLDI), an affiliate of the Insurance Institute for Highway Safety (IIHS), recently examined insurance claims for animal strikes under comprehensive coverage month by month from January 2005 through April 2008. The main finding is that insurance claims for animal collisions are nearly three times higher during November than the typical month earlier in the year.

If a magnitude 7.0 earthquake occured on California’s Hayward Fault today, it would result in economic losses between $210 billion and $235 billion, with only up to $30 billion likely to be insured, according to a study by Newark, Calif.-based Risk Management Solutions (RMS). In its study analyzing the impact of a major earthquake on the Hayward Fault, RMS said magnitude 6.8 earthquake rupturing the Southern Hayward Fault today – based on San Francisco Bay Area’s 2008 population and property exposures – would result in economic losses of between $112-$122 billion, of which $11-13 billion would be insured. The study… Read More »California Earthquake Losses

The U.S. Supreme Court hears arguments on Monday in a closely watched case that could limit liability claims against drugmakers if one of their medicines causes harm. The case pits drug giant Wyeth against a musician who lost part of an arm after she was improperly injected with an anti-nausea drug made by the company. A Vermont jury awarded the woman, Diana Levine, $7 million in damages. Her attorneys argued that Wyeth should have given stronger warnings about the dangers of administering the drug in the way she received it. Wyeth says it acted properly by including the U.S. Food… Read More »Lawsuit Limits for Drugmakers