Florida Audit Says Citizens’ Travel Expenses Excessive; Governor Orders Reform

January 18, 2013Email ThisPrintNewslettersTweetArticleComments

A review by Florida’s chief inspector general contends that employees at the state-created Citizens Property Insurance racked up excessive travel expenses over an eight-month period.

Florida Gov. Rick Scott ordered a review of expenses at the insurer following a report by The Miami Herald and Tampa Bay Times that detailed how top officials stayed at luxury hotels and ate at expensive restaurants.

The review says that while most travel expenses met Citizens written guidelines, they are excessive by state standards. Chief Inspector General Melinda Miguel recommended Citizens be required to follow the same laws that state employees follow.

In a statement, Scott said he agreed with his inspector general and said the insurer was in “urgent need” of reforms.

“A company this large, supported by hard-working Florida families, must be held to the highest standards of integrity,” Scott said.

Citizens is Florida’s largest property insurer and has 1.31 million policyholders, including many people who live in the state’s coastal areas. Citizens finances have come under scrutiny because the insurer has been pushing to raise its rates and change its coverage in order to lessen its exposure in the event of a major hurricane. State lawmakers this year may pass legislation that allows Citizens to raise its rates 13 percent a year

View the Original article

Missouri Regulator: Barton County Mutual Back on Solid Ground

January 8, 2013Email ThisPrintNewslettersTweetArticle1 Comments

Financial conditions at Missouri’s Barton County Mutual Insurance Co. are strong enough that the company can be released from state oversight, a judge has ruled.

A Barton County judge has granted a motion by the department of insurance to release Barton County Mutual from department control.

Barton Mutual came to the brink of insolvency after paying claims from the 2011 Joplin tornado, the department said. At the department’s request, a judge placed the company in rehabilitation in December 2011.

“Keeping the company in business to serve rural Missourians was a top priority for the department.” said John M. Huff, director of the Missouri Department of Insurance. “Through an innovative arrangement with the Missouri Property and Casualty Insurance Guaranty Association, along with significant underwriting and management changes overseen by the department, Barton is now poised for a long and prosperous future. This is a win for policyholders, agents, the insurance industry and the city of Liberal, Mo., where Barton is the largest employer.”

Barton Mutual has about 29,000 policyholders. It had premium sales of $32 million in 2011, but reported claims of $48 million related to the Joplin tornado.

Source: Missouri Department of Insurance

 

Email ThisPrintNewslettersTweetCategories: Midwest NewsTopics: 2011 Joplin tornado, Barton County Mutual Insurance Co., insolvency, John M. Huff, Missouri, Missouri Property and Casualty Insurance Guaranty Association, rehabilitationHave a hot lead? Email us at newsdesk

View the Original article

New York AG Can’t Stop $115M AIG Settlement with Ex-CEO Greenberg, Others

January 8, 2013Email ThisPrintNewslettersTweetArticleCommentsNew York Attorney General Eric Schneiderman cannot stop a $115 million settlement between American International Group Inc. shareholders and the insurer’s former chief executive and others, a U.S. judge ruled on Monday.

The New York Attorney General lacks standing to object to the settlement, U.S. District Court Judge Deborah Batts in Manhattan wrote in her decision. She also denied Schneiderman’s request to intervene.

Batts will decide whether to approve the accord reached in 2009 between shareholders and former AIG Chief Executive Maurice “Hank” Greenberg, former Chief Executive Howard Smith, other executives and Greenberg’s companies C.V. Starr & Co and Starr International Co.

The judge set a fairness hearing for April 10 and could approve the settlement afterward. If she does and no one appeals, it would effectively end a high-profile civil fraud case against Greenberg and Smith brought by the Attorney General’s office in 2005.

A spokesman for Schneiderman did not immediately return a call for comment. A spokeswoman for Boies, Schiller & Flexner, which represents Greenberg and his companies, had no immediate comment. Lawyers for the shareholders and Smith also did not immediately return calls for comment.

The New York Attorney General’s plea for the parties to re- negotiate raises concerns of “undue delay” and demands court action based on “sheer speculation and hotly contested expert evaluations,” the judge wrote in her ruling.

In August, Schneiderman urged Batts to reject the accord, saying an expert for shareholders made a math error that caused the payout to be too low. Lawyers for the shareholders responded the error had no significant effect.

They also said it was “entirely speculative” to expect the shareholders to fare better in new talks.

Lawyers for Greenberg, Smith and the Starr entities had also urged approval of the settlement.

At issue is a 2000 transaction with General Re Corp., a unit of Warren Buffett’s Berkshire Hathaway Inc, which various government investigators have said allowed AIG to inflate loss reserves by $500 million without transferring risk.

Schneiderman argued a math error by the expert caused the transaction to get no weight in the calculation of damages.

Projections and arguments as to the amount of damages include nothing, $100 million, $543 million, $1.2 billion and $6.5 billion, the highest estimated by the New York attorney general’s expert, the judge said in her ruling.

The state case against Greenberg and Smith was brought by former New York Attorney General Eliot Spitzer under the Martin Act, New York’s powerful securities fraud law. Greenberg and Smith are awaiting an appeal in the case at the state’s highest court.

If the federal accord is approved before the state case, the “broad terms of the releases” would preclude New York pursuing its case on behalf of AIG shareholders, Schneiderman has said in court papers.

The case is In re American International Group Inc. Securities Litigation, U.S. District Court, Southern District of New York, No. 04-08141.

 

 

Copyright 2013 Reuters. Click for restrictions.Email ThisPrintNewslettersTweetCompanies: AIG (American International Group)Categories: National NewsTopics: AIG Greenberg settlement, New York Attorney General Eric Schneiderman, securities litigation against AIGHave a hot lead? Email us at newsdesk

View the Original article

ACE Group Names Andrade to Expanded Role for Overseas Business

January 8, 2013Email ThisPrintNewslettersTweetArticleComments

The ACE Group has named Juan Andrade, division president, Global Personal Lines and Small Commercial Insurance, to the additional post of chief operating officer of the company’s Insurance

View the Original article