News Briefs

MASSACHUSETTS

AG Might Sue Marsh: Marsh & McLennan Cos., the insurance broker that paid $850 million to settle New York Attorney General Eliot Spitzer’s accusations of bid-rigging, may face a similar suit from Massachusetts Attorney General Tom Reilly. Reilly intends to sue Marsh, alleging the broker deceived at least 17 Massachusetts customers by soliciting fake quotes and steering clients to insurers that paid hidden fees, his office told Marsh Chief Executive Michael Cherkasky in a Sept. 8 letter. The letter gives the brokerage an opportunity to discuss possible resolutions.

Marsh spokesman Jim Fingeroth said the company continues to have discussions with Reilly and is cooperating

The letter said Gillette Co., State Street Corp., Analog Devices Inc. and the University of Massachusetts were among those harmed by Marsh’s alleged infractions.

Fair Plan Seeks 25% Hike on Cape Cod: Despite indications that a 28.4 percent statewide rate hike is called for, the Massachusetts Fair Plan is requesting a 12.5 percent hike across all homeowners policies. The residual market insurer’s overall request includes an average hike of 12.9 percent on the major homeowners forms (HO-2,3,5) and a slight 0.3 percent jump for tenants’ policies (HO-6). The organization has also asked for an increase of 6.4 percent on dwelling policies statewide. Officials said actuarial indications support a filing for an increase of 29.3 percent for homeowners and 9.3 percent for dwellings.

The Fair Plan has asked for its biggest increases for coastal Cape Cod, where it has emerged as the leading property insurer. For Cape homes, it has filed for an average 25 percent hike, although its actuaries maintain that experience supports as much as a 68 percent increase.

In Cambridge, Boston, Springfield and other urban areas, rates would go up about 5 or 6 percent or not at all.

The residual market property insurer has voluntarily “tempered” its rate request, exercising restraint under a new law that lifts caps on how much of an increase it can seek, according to John K. Golembeski, president of the Massachusetts Property Insurance Underwriting Association, the Fair Plan’s formal name.

The insurance commissioner must still approve any final rates. A public hearing has been called for Oct. 11.

CONNECTICUT

Malpractice Rates Stay Even: Connecticut Medical Insurance Co., one of the state’s largest writers of medical malpractice insurance, has decided to hold its rates steady for 2006 after raising them each of the last five years.

The doctor-owned insurer said its premiums are adequate to cover projected claims, which it estimates will average more than $21,600 each next year. That’s about double what the average was 10 years ago. Some long term, claims-free insureds may even see their bills go down next year. Loss experience credits will range from 7.5 percent to 25 percent.

MAINE

Drivers, Insurers Face New Laws: Maine insurers and drivers woke up on Sept. 1 with new laws to follow.

Insurance companies can no longer “steer” accounts to favored body shops. The law now says they can’t imply to customers who have claims in auto crashes that they must have repairs done at designated shops.

For car owners, a new law makes failure to register a motor vehicle within 30 days of moving to Maine a traffic violation with a maximum fine of $50, which goes up after 150 days. On the roadways, a new law makes it illegal to pass a vehicle when the road is painted with an unbroken center line or solid double lines. A third drunken driving offense is upgraded to a Class C crime, meaning violators face fines exceeding $1,000. Motorists who jazz up their rides with lights should note a new law that restricts auxiliary lighting on cars. Lights must be white if they’re on the front of the vehicle, amber if on the side and amber or red if in the rear.

NEW YORK

The Hartford Subpoenaed Again: The Hartford Financial Services Group Inc. has received another subpoena from New York Attorney General Eliot Spitzer about variable annuity sales and about how it reports workers’ compensation premiums. The Hartford previously disclosed that Spitzer had subpoenaed the company about sales of variable annuities to senior citizens in New York.

The most recent demand for information seeks details about New Yorkers’ purchases of variable annuities under three possibilities: when money was withdrawn from a 401(k) savings plan or other tax-advantaged retirement savings plan to buy the annuity, annuity purchases made within such a plan and kept there and information about purchases of variable annuities later placed into 401(k) or other plans that receive favorable tax treatment.

NEW JERSEY

AG Asked to Probe Forrester: A state election panel has forwarded a top Democratic lawmaker’s request for a probe into campaign contributions made by GOP gubernatorial candidate Doug Forrester to the New Jersey Attorney General’s Office.

Assembly Majority Leader Joseph Roberts (D-Camden) has asked the state Election Law Enforcement Commission to investigate whether Forrester violated state law by contributing to Republican committees and candidates while owning an insurance company. Fourteen other Democratic Assembly candidates have filed similar requests with ELEC.

Roberts’ request came after a ruling by Banking and Insurance failed to clear up whether the related company, Heartland Fidelity Insurance Co., falls under the New Jersey law.

At issue is $37,500 in contributions by Forrester to the Republicans’ political action committee for their Assembly candidates. The statute in question falls under New Jersey’s criminal code. The law was designed to prevent undue corporate influence and bars those with a majority interest in insurance or banking firms from contributing to political campaigns.

PENNSYLVANIA

Waddell & Reed Reaches Settlement: State Insurance Commissioner Diane Koken has reached a settlement that requires the brokerage firm Waddell & Reed to pay $11 million in restitution to consumers nationwide whose variable annuities were switched from one product to another. The Pennsylvania Insurance Department estimates that 150 consumers were affected. “Some Waddell & Reed producers violated consumers’ trust by deliberately campaigning to switch customers from one variable annuity to another,” Koken said. “These recommendations were made without regard to the customers’ best interests and ultimately cost consumers money in surrender fees.”

The settlement was coordinated through the National Association of Insurance Commissioners and involves several state insurance and securities regulators.

MARYLAND

Administration Employees Convicted: Maryland Attorney General J. Joseph Curran Jr. announced that two former Maryland Insurance Administration agent enforcement officers, William E. Unkle and Joseph E. Wolfe, pleaded guilty to criminal charges in the Circuit Court for Baltimore City. Unkle had been charged with unauthorized access to computers. Wolfe had been charged with conspiracy to gain unauthorized access to MIA’s licensing system and caused the system to reflect that both Wolfe and Unkle had insurance producer licenses when in fact they did not.