News Briefs

MASSACHUSETTS

Agents Contribute $20K to Katrina Relief: The Massachusetts Association of Insur-ance Agents is sending a $20,000 check to the Big ‘I’ Katrina Relief Fund established by its national organization, the Independent Insurance Agents and Brokers of America, to help fellow agents and their employees affected by the disaster.

MAIA President and CEO Frank Mancini said that in addition to the $20,000 contribution, his members would also work with IIABA and other state associations to assist independent insurance agents in every way possible.

All donations received will assist insurance industry colleagues, including independent agents, brokers, their employees, and their families. The IIABA itself made a $10,000 initial contribution to the fund.

Checks should be made payable to “Big ‘I’ Katrina Relief Fund” and mailed to: Big ‘I’ Katrina Relief Fund, c/o InsurBanc, 10 Executive Drive, Farmington, CT 06032 or visit www.insurbanc.com.

Pollution Costs Firm $28 Million: A Connecticut-based company that contaminated California’s San Gabriel Valley groundwater with its metal cleaning and degreasing procedures has agreed to spend $27.8 million on environmental projects and penalties in a Superfund settlement reached with the U.S. Environmental Protection Agency, officials said.

Farmington, Conn.-based Carrier Corporation, which manufactures air conditioning and heating units, and its parent company, United Technologies Corp., will spend about $26.5 million to build a groundwater cleanup system that will include the installation of wells to pump out contaminated water and prevent its migration.

They also will build treatment plants to remove contaminants from the groundwater, EPA officials said in a statement. The firms also will spend $468,750 on an environmental project at a former duck farm that overlaps the contamination area.

The EPA listed several sections in the San Gabriel Valley in California as Superfund sites in 1984.

MAINE

Dirigo Savings at Issue: The stakes
are high for Maine insurance companies, businesses and the state-sponsored health insurance program as a deadline approaches to figure out the savings that can be attributed to the state’s Dirigo Health initiative.

Insurance companies are supposed to be assessed a fee to reflect the savings, and they can pass the cost of those fees on to employers. The fees will help fund the budget for the state-sponsored DirigoChoice insurance program.

With so many conflicting interests involved, consensus has been elusive. A 10-member group charged with developing a methodology for determining the savings recently issued two reports: one representing Dirigo Health interests; the other from the “payor” caucus of insurers and employers. The two sides disagree on how to measure things such as hospital operating margins, bad debt and charity care. The payor group further says the fee should apply to only 50 percent of the calculated savings from Dirigo Health.

The Dirigo Health board of directors must choose a methodology to present to the state Bureau of Insurance. The superintendent of insurance will then hold a public hearing on Oct. 27.

DirigoChoice is a private-public program created through legislation with hopes of providing access to health care coverage to 130,000 Mainers who lack it by offering coverage at discounted rates.

NEW YORK

Damages Allowed Despite Late Notice: A New York trial judge has dealt a blow to New York State’s insurance no-fault auto insurance notice requirement, under which insurers can deny coverage if a claim is not filed within a set period.

Following a trial before the Acting Supreme Court Justice Jeffery G. Berry, a no-fault policyholder has been awarded past medical expenses, lost wages and attorneys’ fees after the court granted summary judgment holding that her no-fault insurance company, Travelers Property Casualty Corporation, wrongfully denied her no-fault benefits on the grounds of late notice. The policyholder failed to file a claim within the prescribed period only because she was the victim of a hit-and-run and was informed by her agent that no claim could be filed until the other driver was identified, according to the trial record.

Judge Berry held that the plaintiff had “reasonable ground” for failing to submit timely notice and that her insurance policy therefore remained in force.

The case, Alison C. Manges v. Travelers Property Casualty Corp., No. 1036/00, was heard in New York Supreme Court, Orange County, and handed down on Aug. 18, 2005.

Terror Suits Against Arab Bank Proceed: A U.S. judge in Manhattan upheld three lawsuits accusing the Jordan-based Arab Bank of promoting Palestinian suicide attacks by funneling Saudi money to bombers’ families.

U.S. District Judge Nina Gershon denied six of eight counts in Arab Bank’s March motion to dismiss the litigation, allowing bombing survivors and victims’ families to move forward with their lawsuits seeking hundreds of millions of dollars in damages. The lawsuits claim that Arab Bank aided terrorism by acting as the administrator of an “insurance plan” by the Saudi Committee in Support of the Intifada Al Quds, which paid $5,300 to the families of Palestinian bombers killed in attacks by Hamas, Islamic Jihad and Al Aqsa Martyrs’ Brigades.

The plaintiffs are U.S. citizens, including the widow of John Linde Jr., a security guard from Missouri who died when a bomb tore apart a vehicle in a U.S. diplomatic convoy in the Gaza Strip in 2003.

Arab Bank contended the lawsuit should be thrown out because the bank had no intention of promoting terrorism and because the plaintiffs could not link the bank’s actions to their injuries or their relatives’ deaths.

“It really opens the way for all of these American terror victims to have their day in court,” said Mark Werbner, one of the lawsuit’s lead attorneys.

Arab Bank said it remains confident that it will prevail at trial. “The bank abhors terrorism,” it said in a statement.

U.S. regulators announced last month that Arab Bank would pay a $24 million civil fine for allegedly inadequate controls to prevent money laundering at its New York branch. The Central Bank of Jordan, which oversees the Arab Bank, announced earlier this year that the New York branch would be closed.

NEW JERSEY

AG Probing Forrester Donations: The New Jersey Attorney General will investigate whether Doug Forrester, the Republican candidate for governor, violated a state law prohibiting insurance company owners from contributing to political campaigns.

The attorney general’s involvement follows a request by Forrester’s Democrat opponent, U.S. Sen. Jon S. Corzine, for an investigation after a split opinion by state insurance regulators failed to settle the matter. The Department of Banking and Insurance recently said Heartland Fidelity Insurance Co., in which Forrester holds a 51 percent stake, falls outside New Jersey regulations because the company was licensed as a captive insurer in Washington, D.C. But the department also found that Heartland does business in New Jersey through another Forrester-owned business, BeneCard Services Inc., a medical benefits provider. Heartland insures the price of prescription plans from BeneCard. Each campaign claimed the insurance department ruling as a victory.

New Jersey law prohibits insurance companies from making political contributions to candidates or political organizations in the state. The law also covers those individuals with majority ownership in those companies. Forrester has made more than $416,000 in state campaign contributions since establishing Heartland Fidelity three years ago.

PENNSYLVANIA

Rep. Seeks Emergency Aid Law: Rep. Peter J. Daley, D-Washington/Fayette, said he would introduce a bill that would provide flood insurance premium subsidies and other small disaster relief to homeowners, small businesses and municipalities to address catastrophic losses that do not affect a large enough population to receive federal disaster assistance.

“In the wake of the residual effects of hurricanes in the past few years that have dumped many inches of rain over Pennsylvania, causing widespread flooding, this bill makes sense to assist those who may not have sufficient coverage,” Daley said. “My bill would encourage people to purchase their normal homeowner’s coverage, and it would not create a state pot of disaster money that the federal government could require to be used first in any disaster.”

The Small Disaster Assistance portion of Daley’s legislation would subsidize the flood insurance premiums of any homeowner or small business with less than 25 employees in a 100-year flood plain at a level significant enough to encourage all those eligible to enroll. It would further subsidize the premiums of homeowners and renters within the 100-year flood plain and with household incomes less than 200 percent of the poverty level.

Daly’s proposal calls for funding to purchase a statewide insurance policy to cover damages by surface waters to residential and small business properties outside the 100-year flood plain (on the assumption that this would be cheaper than subsidizing premiums for all properties outside the flood plains).

Finally, his bill would include a grant of emergency powers to the governor to intervene in physical, social, or economic emergencies to suspend state gasoline taxes for a 60-day period.

Daley is currently seeking co-sponsors for the measure and will introduce the bill this fall.

VIRGINIA

Geico and Google Settle: Google Inc. has settled the last part of a lawsuit that alleging that its online search engine advertising system illegally exploited insurer Geico Inc.’s brand. Geico stated simply that the case filed in the U.S. District Court for the Eastern District of Virginia “has been resolved to the mutual satisfaction of the parties.” Geico said the settlement terms were confidential.

The deal avoided a trial with the Washington, D.C.-headquartered insurer, which is a unit of Berkshire Hathaway.

Mountain View, Calif.-based Google had scored a victory in the trademark infringement case in the Virginia federal court late last year when U.S. District Judge Leonie Brinkema rejected Geico’s request to block Google from letting rival insurance companies pay for the right to have their ads displayed after Geico’s name is included in a search request.

But last month in her written opinion Brinkema left the door open for Geico to collect damages from Google for featuring ads from rivals that used Geico’s name in the heading above the Web links, as well as the subtext. Brinkema gave Google and Geico 30 days to settle that part of the dispute or face a trial.

Had Geico prevailed, it could have sapped Google profits. The ads powered Google to a $712 million profit on revenue of $2.6 billion during the first half of this year.

Google’s advertising still faces trademark lawsuits filed by another insurer, AXA Group, and Plymouth, Mich.-based American Blind and Wallpaper.