Jeff Amy should be proud. His story was picked up by the AP and posted to the Yahoo Allstate summary page. We’ll link his report at the Mobile Press Register directly:
Allstate Corp. and Alfa Mutual group will cumulatively drop wind coverage on 14,000 homeowner policies in Mobile and Baldwin counties over the next 18 months, Alabama Insurance Commissioner Jim Ridling said Tuesday.
The cuts will affect as many as 7 percent of all homeowners in the two counties.
The moves are another jolt to Alabama’s ailing coastal insurance market. Since 2004’s Hurricane Ivan, Allstate, Alfa and State Farm Fire and Casualty have said they would drop wind coverage or all coverage on nearly 41,000 policies, according to Press-Register counts.
Alfa spokesman Jeff Helms said models show his Montgomery-based firm has too much money at risk if a hurricane hits Alabama.
“This is something we needed to do to make sure Alfa could continue to serve its policyholders and pay claims statewide.” Helms said of the decision to cut wind coverage from 5,000 policies.
Allstate, the state’s No. 3 property insurer, is withdrawing in reaction to state regulators’ refusal to allow it to raise rates as high as it wants to pay for reinsurance, said Ridling and Shane Robinson, spokesman for the Northbrook, Ill.-based company. Continue reading “Allstate cancels thousands of policies in coastal Alabama”
There have been a good number of news tidbits that do not necessarily constitute a post here on Slabbed on their own but when taken together tie up several loose ends and lend context to a story that does merit it’s own post in Mike Chaney’s recent insurance forum held last Thursday and Friday here on the coast. So let’s backtrack a week and shake us up slabbed insurance cocktail by beginning with Anita Lee’s coverage of day 2:
Gov. Haley Barbour joined the coastal insurance debate Friday, telling an audience he believes regional compacts would be the best way to regulate wind coverage in coastal zones from Texas to Maine.
Barbour introduced The Travelers Insurance Cos. president, Brian MacLean, to explain the company’s proposal for improving the coast insurance market. Insurers have pulled back from coastlines in recent years, leaving state-run wind pools to fill the void.
Wind pools were intended as insurers of last resort, but their market shares have grown to levels that experts agree are unsustainable. Insurance works by spreading risk, not concentrating it.
Haley has been conspicuously absent from the insurance scene refusing to comment on the litigation while offering cheap lip service to Gene Taylor’s multi peril bill. I suspect he and the State GOP has been searching for a way to throw a bone to the people on the coast that helped elect him while working hard to preserve GOP big business bonafides with the campaign money machine that is big insurance. Continue reading “Slabbed Daily July 22-24. Lets tie a few things together”
Ajax RE – named after the suicidal Greek warrior from Homer’s Iliad – were there sufficient funds to repay the bonds’ principle on maturity date of May 8th or just default dead money not talking?
We found Ajax’s achilles heel in early March. We too now wonder if the bagholders I mean bondholders were made whole or if they are suffering their losses in silence.
Meantime it is full speed ahead for USAA and their new Bermuda based SPE Residential Re.
Kevin Buckel is a familiar name to us at Slabbed and I was very happy to hear from him via email last week. Anita Lee at the Sun Herald has been keeping up with Mr Buckel’s efforts at fostering transparency at the Mississippi DOI as well as his citizen push to have the legislature afford Mississippian/policyholders basic protections afforded citizens elsewhere via a policyholder bill of rights which once again fell victim earlier this year to the insurance lobby at the capitol. Mr Buckel has also received assistance and some backing from United Policyholders in his efforts.
The DOI here in Mississippi, run by former insurance agent underwriter Mike Chaney, has thus far resisted Mr Buckel’s efforts. He subsequently filed suit against the Commish to compel production of the MID’s public records in an action I briefly profiled in early March. The Sun Herald story is long gone from their website but there is still a copy in the google cache for those interested in seeing the story in its entirety.
Since that time Mr Chaney has filed a motion for summary judgement and Mr Buckel has replied. Mr Buckel has a website with links to some of those legal docs as well as proposed state legislation he has pushed.
Tomorrow there will be a hearing on this case. We’re trying to get more specific info which is a challenge as the online court docket is down. If Steve can shake some time loose we’ll also be there.
Kevin emailed me with the hearing time tomorrow. It will be at 9:30AM at the County Courthouse, Chancery Court.
Thursday, April 23rd, 2009
BRING LOUISIANA STATE AND LOCAL GOVERNMENT INTO THE TWENTY FIRST CENTURY!
Just how many boards, commissions, water districts, sewer districts, parish auditors, law enforcement offices, and a whole list of other special districts are spread throughout Louisiana? No one really seems to know. Some estimates are as high as 7000. But can you believe no agency, public or private, can list all the public bodies that exist in Louisiana today? And if no one knows the number, than it goes without saying that no one knows the overlapping cost.
Start with the 64 parishes. In the rural farming economy of the early twentieth century, each parish served as the synergy of daily life in Louisiana. There was a need for local road and water districts to take care of rural needs. Government, by nature, was local. Police jurors and sheriffs ran their respective local districts like a fiefdom. When election time came around, rural voters were enmeshed in electing local candidates who directly touched their lives.
The sheriff was there to not just keep you safe, but to offer a ride to town for groceries or a doctor’s visit in many cases. The local police juror kept the ditches from overflowing and could see to it that a little gravel was spread on the dirt road leading to your farmhouse. Baton Rouge was often a two day ride on horseback or an all day trip by car over muddy dirt roads. What happened or did not happen at the local courthouse had a direct bearing on the daily lives of a majority of Louisianans. Continue reading “Jim Brown on the”
Time is short so I’ll not offer much analysis and what analysis I offer is in the form of the questions I asked myself while reading it?
- What money “made the market” and how and to whom are the bonds placed (ie sold)? See this lengthy post I did a week or so back to understand why that question is important.
- What role is TARP playing in financing this deal? Inquiring minds in policymaking positions what to know. (See first bullet point)
- Who are the players making money from the act of doing the deal and how is it structured to avoid past mistakes?
Reuters has the story:
LONDON, Feb 27 (Reuters) – Standard & Poor’s has assigned a preliminary BB rating to U.S. insurer Liberty Mutual’s planned $200 million catastrophe bond, to be issued via special purpose vehicle Mystic Re II, the credit rating agency said.
In a pre-sales report published late on Thursday, S&P said Mystic Re II’s Series 2009-1 notes will transfer some potential losses by Liberty Mutual and affiliates from U.S. hurricanes and earthquakes to capital markets investors. Continue reading “News from the cat house……”
Time is very short. I’ll update this post with further analysis later.
We’ll begin with this story via Reuters:
A catastrophe bond sold by U.S. insurer Allstate Corp (ALL.N) is in default after special purpose vehicle Willow Re failed to make in full an interest payment that fell due last week.
The transaction is among four catastrophe bonds guaranteed by a unit of Lehman Brothers that were downgraded by credit rating agency Standard & Poor’s following the U.S. investment bank’s Sept. 15 bankruptcy filing.
Allstate confirmed late on Monday that Willow Re had not made the payment, due Feb. 2, within the five-day grace period. Continue reading “Breaking: Allstate Confirms Default of Willow Re Cat Bonds”
A nationwide demand for increased transparency fueled the demand for system and regulatory reform.
- As we move to coordinate with international standards will our financial and regulatory systems become more transparent or opaque?
- When all is said and done, how much control will our government have over our nation’s financial and regulatory systems?
Editing note: Taking my lead from Sop, earlier today, I positioned two posts from our files at the top of the page as points of reference. However, in preparation for the week ahead, I’ve added excerpts from both posts following these brief comments or you can click on the title will take you directly to the full post of the Future of Insurance and Regulatory Reform (January 26, 2009) and All the World’s a Stage... (December 5, 2008 ) in our files.
Financial Regulation: A Framework for Crafting and Assessing Proposals to Modernize the Outdated U. S. Financial Regulatory System (GAO, February 4, 2009) contains a graphic depicting the increasingly global aspects of financial markets.
… with the increasingly global aspects of financial markets, the current fragmented U.S. regulatory structure has complicated some efforts to coordinate internationally with other regulators. For example, the current system has complicated the ability of financial regulators to convey a single U.S. position in international discussions, such the Basel Accords process for developing international capital standards, and international officials have also indicated that the lack of a single point of contact on, for example, insurance issues has complicated regulatory decision making.
Take a look at Key Developments and Resulting Challenges That Have Hindered the Effectiveness of the Financial Regulatory System.
We’ve seen the frameworks, we need to see the picture – Continue reading “Regulatory reform – a henhouse welcoming the fox (Updated)”
Brian Martin’s comments on the Open Thread provided links to news from coastal areas as distant as Massachusettes and Texas – including one about the 67% rate increase State Farm has proposed in Florida.
State Farm Florida Insurance Co. now wants a 67 percent average statewide property insurance rate increase, months after Florida Insurance Commissioner Kevin McCarty said he would reject the insurer’s proposed 47 percent rate boost.
Three issues of particular interest were raised in the story:
- discounted rates for certain property improvements;
- projected exposure for the upcoming year; and,
- an adequate surplus.
discounted rates for certain property improvements
The insurer said it took a big hit on discounts it’s required by state law to provide for policyholders who fortify their houses and condominiums against hurricanes. The number of State Farm policies that qualified for discounts in Florida increased from 112,000 in late 2006 to 264,000 as of August.
Ironically, State Farm struck a deal with Florida insurance officials in September agreeing to refund $120 million to policyholders and pay the state a $1 million fine to make up for discounts it should have provided for hurricane-resistant homes.
If discounts are a revolving door for rate increases as this suggests, then the stage is being set in Mississippi and Louisiana according to recent Insurance Journal interviews with the Insurance Commissioner in each state. Continue reading “State Farm’s 67% rate increase request raises important issues”
Sop knows finance and I, on the other hand, know about working with people who would water a “hedge” if they had one, invest in “cats” that kill mice, and think exotic credit comes from a payday lender.
Hurricane Katrina, however, was a great equalizer; and, three years after the “F” word took people in Mississippi-Louisiana for a ride, the driver reached the end of the road on Wall Street – and was last seen frantically looking for a payday lender.
Financial Crisis: Wall Street dead end for disaster protection.
In the rear view mirror is the “F” word’s detachment as coverage issues became the focus of litigation following Katrina and an OIG report suggesting why – which explains how the “F” word made it all the way to Wall with the financial crisis. Continue reading “The “F” word hits the road – finds Wall is dead end Street (Part 3 of 3)”