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RAA Releases Twelve Month Underwriting Results

In a survey of reinsurers’ statutory underwriting results conducted by the Reinsurance Association of America (RAA), a group of 19 U. S. property casualty reinsurers wrote $23.9 billion of net premiums during the twelve-months ended December 31, 2009, which was flat when compared to the prior year. The combined ratio for the group was 93.5%, improving from the 101.8% combined ratio reported for the same period in 2008. The combined ratio is attributable to a 63.3% loss ratio and an expense ratio of 30.2 %. Policyholders’ surplus was $77.3 billion, up from the $64.4 billion reported for the same period in 2008.

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posted March 15, 2010

Proposed Homeowners’ Protection Act Ill Advised

In a strongly worded letter to House Committee on Financial Services Chairman Barney Frank and Ranking Member Max Bachus, the RAA came out swinging against the Homeowners’ Protection Act of 2009 (HR 2555)—legislation that would have the federal government guarantee municipal obligations of state sponsored and quasi-state sponsored municipal bonds—essentially creating a federal reinsurance program that would engage directly in offering reinsurance for insured properties. The RAA contends the proposed legislation is primarily designed to address the underfunded state insurance facilities in the state of Florida.

Click here to read the RAA’s letter.

posted March 8, 2010

Senate Recognizes Urgency--Extends NFIP until March 28

Senator Jim Bunning (R-KY), who filibustered legislation that included the reauthorization of the National Flood Insurance Program, finally dropped his objections allowing the Senate to approve the legislation, which extends the NFIP through March 28, 2010. Bunning objected to the legislation—H.R. 4691— because it did not specify what revenues would be used to pay for it. The extension gives Congress the time to consider a broader extension of the NFIP until December 31, 2010.

posted March 5, 2010

Case Law and Contract Clause Database

Since going online in the fall of 2009, the RAA’s Case Law and Contract Clause Database—a research tool for attorneys, contract writers and brokers to quickly access summaries of reinsurance case rulings and/or a court’s interpretation of the wording of a particular contract—has been updated to include 44 additional cases, and excerpts and court discussion of the clauses related to these cases have also been added.

A few of the recent rulings are:
•    Arbitrator panel selection, allegations of bias, and panel authority;
•    Scope of the arbitration clause, including demand for arbitration by non-signatory;
•    Waiver based on a service of suite provision;
•    Reverse pre-emption on the basis of the McCarran-Ferguson Act;
•    Fraudulent conveyance in insolvency.

Visit the Case Law and Contract Clause Database to review these and other new rulings. If you’re not signed up for the Database, contact Pat Cheetham at cheetham@reinsurance.org.

posted March 5, 2010

RAA, AIA and Ceres Urge NAIC To Implement Climate Risk Disclosure Survey

With states set to implement the NAIC’s Insurer Climate Risk Disclosure Survey this May, opponents in some states—primarily insurers who have raised concerns about their ability to respond to the survey—are in a full court press to delay the Survey. The RAA, AIA and Ceres have gone on record with the NAIC to move forward with the survey’s implementation in May as planned, and commending the NAIC for developing a disclosure survey that would (1) provide uniformity of information rather than multiple disparate state initiatives, and (2) facilitate a central repository of public information rather than multiple response repositories, which would be less efficient for the states and consumers. Click here to read the RAA, AIA, Ceres letter.

posted March 2, 2010

Worries Over Ballooning Federal Deficit Scuttles NFIP Extension

The National Flood Insurance Program (NFIP) has lapsed after Senator Jim Bunning, R-KY, blocked omnibus legislation that included renewal of the NFIP. Bunning doesn’t oppose extending the NFIP, but the method being proposed to pay for it, which would add to the deficit. NFIP has been extended a number of times in the last two years while Democrats and Republicans argue over whether wind damage should be a covered peril in the program. Democrats support including wind; Republicans and many insurance industry trade groups do not.

Until the program is reinstated, the NFIP cannot issue new policies, increase coverage on existing policies or renew expiring policies.

Click here to read the National Underwriter article on the NFIP.

posted March 2, 2010

Coalition Opposes Homeowners’ Defense Act

In a letter to Representatives Barney Frank and Spencer Bachus of the House Financial Services Committee, the Americans for Smart Natural Catastrophe Policy, which counts the RAA among its members, expressed strong opposition to the Homeowners’ Defense Act, H.R. 2555, which will be heard in the Financial Services Committee in March. “If enacted,” the Coalition notes, “the Homeowners’ Defense Act will cost taxpayers billions of dollars, discourage the insurance and reinsurance private market, and result in incentives to build in unsafe and environmentally fragile areas.” H.R. 2555 was introduced by Ron Klein of Florida to create a federal bailout program designed specifically to benefit hurricane-threatened Florida at the expense of all U.S. taxpayers. Click here to read the Coalition’s letter; click here to see the Coalition’s members.

And on a related note, a group of environmental groups—among them, the Sierra Club, National Wildlife Federation, and the Audubon Society—separately sent a letter to Barney Frank expressing “significant concerns” that providing a federal insurance subsidy will only create incentives for more development in environmentally sensitive coastal areas and increase exposure to hurricane-related risks, leaving more people more exposed to harm and increase adverse impacts to the environment. Click here to read the letter.

posted March 2, 2010

Global Reinsurance Market Competitive, Supply Abundant, Pricing Down

Despite tumultuous financial markets in 2008/2009, global reinsurers continued to provide needed capital and risk transfer capabilities to the U.S. market, including the U.S. cat risk market. The market is characterized by abundant capacity, competition, and a downward trend in pricing. Click here to read more about the state of the reinsurance market at 1/1/2010.

posted February 3, 2010

Insurance Trades Fight Efforts to Amend McCarran-Ferguson

With Congress set to consider legislation to amend the McCarran-Ferguson Act in early February, insurer and reinsurer trade association are poised to fight the proposed changes to the rules for medical liability insurers, arguing that med mal is not a health insurance product, but rather a property/casualty insurance liability product.

In a letter sent to members of Congress, the trades try to clear up a number of popular misconceptions about McCarran-Ferguson—that its antitrust provisions protect anticompetitive activities by medical liability insurers (they do not); that McCarran-Ferguson gives insurers a blanket exemption from antitrust laws (it does not); and that efforts to further limit McCarran-Ferguson’s antitrust provision could lead to less competition—an outcome that would undercut the fundamental purposes of the federal antitrust laws.

Read the letter.

posted February 3, 2010

SmarterSafer Coalition Submits Recommendations on Natural Disaster Recovery

The SmarterSafer Coalition, which counts the RAA among its members, has submitted a letter to the Secretary of Homeland Security and the Secretary of Housing and Urban Development—two members of the White House Long-Term Natural Disaster Recovery Working Group that has been charged with making recommendations to the President so that a national framework for addressing disasters can be established—asking them to consider disaster preparedness and disaster resiliency as a means to ensure quick recovery following a natural disaster. The group urges (1) pre-disaster mitigation focused on property owners; (2) inclusion of disaster resiliency in existing programs, such as the American Recovery and Reinvestment Act; and (3) not building in high-risk and environmentally-sensitive areas.

Click here to read the Coalition’s letter.

posted January 20, 2010

Democrats Push for Insurer Antitrust Exemption Repeal

Eighteen Democratic senators are urging the White House to include language in the final healthcare reform bill repealing the antitrust exemption long afforded health and medical liability insurers, suggesting “the competitive activities of health insurers and medical malpractice insurers remain effectively unchecked.” The insurance sector, led by the PCI, is intensely lobbying against such language, saying it could have “major negative repercussions for consumers…and potentially lead us into another medical malpractice crisis.”

Click here to read the letter.

posted December 18th, 2009

European Insurance Forum 2010

The European Insurance Forum, March 29-30, 2010 in Dublin, is an international forum attracting senior international re/insurance industry leaders to address the issues facing the international re/insurance sector today.

Confirmed speakers include Mike O'Halleran--Aon Benfield, Brad Kading--Association of Bermuda Insurers & Reinsurers, and Barbara Ridpath--International Centre for Financial Regulation. Issues to be addressed include Solvency II, other relevant regulatory issues, and insurance market opportunities and challenges. Visit European Insurance Forum 2010 for more information about the conference.

posted December 18th, 2009

RAA’s 2009 Historical Loss Development Study

The 2009 edition of the Historical Loss Development Study will be published in early January. The study presents historical loss development patterns, by accident year, for companies writing casualty excess reinsurance for AL, GL, Med Mal and Workers Comp, and for companies writing high deductible or umbrella insurance. Historical loss development is also presented separately for treaty vs. facultative business, and separately by range of attachment point. Data for "Reported Loss Data Triangles" and "Paid Loss Data Triangles" are available in Excel format on the RAA website for purchasers of the Study.

The study also discusses how loss development patterns have changed over the last few years, suggests possible reasons for those changes, and also discusses how loss development has varied depending on the circumstances and the nature of the business being considered.

Click on the link above for more information about the study. Contact Ann-Marie Mwombela to pre-order a copy of the study.

posted December 15th, 2009

SmarterSafer Opposes State Cat Fund Bailout Amendment

SmarterSafer.org, a national coalition supporting environmentally-responsible and fiscally-sound approaches to disaster mitigation, has written a letter to members of Congress critical of an amendment filed by Rep. Kathy Castor of Florida to the “Wall Street Reform and Consumer Protection Act.” The amendment would essentially set up a bailout mechanism for state catastrophe insurance funds—costing taxpayers billions of dollars and doing little to protect coastal residents from the threat of hurricanes. Click here to read the coalition’s letter.

posted December 7th, 2009

House Financial Services Committee Passes Federal Insurance Office Act

The House Financial Services Committee passed the Federal Insurance Office (FIO) Act of 2009 on December 2. Click here to read the RAA’s press release.

posted December 7th, 2009

RAA Supports Legislation to Expand Weatherization Assistance Program

Senator George LeMieux (R-FL) has introduced legislation to amend the Energy Conservation and Production Act to increase weatherization assistance for low-income homeowners so they have more resources to “storm proof” their homes and at the same time, make them more energy efficient.

Click here to read the RAA’s press release.

posted December 1st, 2009

RAA Reports Nine-Months Underwriting Results

Nineteen property-casualty reinsurers wrote $18.7 billion of net premiums during the nine-months ended September 30, 2009, compared to $19.0 billion for the same period in 2008. The combined ratio for the group was 95.1%, an improvement over the 104.2 % reported for the same period in 2008. Policyholders’ surplus was $74.1 billion, up from $72.1 billion reported for the same period in 2008. Click here to read the Underwriting Report.

posted December 1st, 2009

RAA Welcomes Transatlantic Re

Transatlantic Reinsurance Company (TRC) is a new member of the RAA. For more about TRC, visit their website.

posted December 1st, 2009

Trades Oppose Heightened Prudential Regulation for P/C Insurers

Industry trades, including the RAA, have expressed concerns about provisions in the Financial Stability Improvement Act of 2009 discussion draft that would allow for heightened prudential regulation over insurers. In a letter addressed to Barney Frank, Chairman of the House Committee on Financial Services, the trades argue that any federal proposal to subject financial companies to heightened prudential supervision should start from the premise that property and casualty companies engaged in insurance activities should not be subject to such supervision, in particular because as written, the discussion draft relies on bank-centric regulatory standards that are inapposite to the insurance regulatory model.

Click here to read the trades letter.

posted November 16th, 2009

House and Treasury Draft Legislation to Address Systemic Risk

The House Financial Services Committee and the Department of Treasury have introduced the "Financial Stability Improvement Act of 2009," a bill intended to create a mechanism for monitoring and reducing threats that systemically risk firms pose to the financial system and establish a process for winding down large, financially-troubled non-bank financial institutions in a way that protects American taxpayers. Critics of the draft legislation say it would be more effective to regulate activities rather than institutions.

Click here to read a discussion of the legislation.

posted November 16th, 2009

Pan-European Insurance Forum Supports Federal Insurance Office

In a letter sent to various members of the Senate and House, the Pan-European Insurance Forum, which includes a number of RAA member companies, underscored the importance of creating a system of insurance supervision by advancing U.S. efforts to establish a regulatory regime that is recognized by similar jurisdictions. The Forum also endorsed the creation of the Federal Insurance Office (FIO) to enhance the U.S.'s voice in international discussions regarding supervision of the insurance marketplace.

Click here to read the letter.

posted November 16th, 2009

Insurance and Climate Change Summit

The National Association of Insurance Commissioners, in collaboration with the RAA and AIA, will host the Insurance and Climate Change Summit on December 9, 2009 in San Francisco. The Summit is a forum for the industry, regulators, scientists, modelers and the general public to collaborate and explore climate-related topics, including risk and opportunities of climate change on investments, evolving "green" insurance products, and the latest on the science of climate and climate risk modeling.

Click here to read more about the program.

posted November 16th, 2009

Americans for Smart Natural Catastrophe Policy Laud Disaster Response Legislation

The Americans for Smart Natural Catastrophe Policy (www.smartersafer.org) have endorsed H.R. 3377, "The Disaster Response, Recovery, and Mitigation Enhancement Act of 2009." The legislation authorizes new investments in pre-disaster mitigation to help modernize the nation's public warning systems and provide incentives to states to adopt and enforce improved building codes. The coalition, which counts the RAA among its members, sent the following letter of support for the legislation to members of Congress.

posted November 13th, 2009

State Legislative Reporter #09-26

Legislative advocacy updates for Florida, Texas, Massachusetts, Michigan, Missouri, and more. Regulatory announcements for DC.

RAA Members click here to read.

posted November 13th, 2009

Smartersafer.org on the NFIP

Smartersafer.org, a broadly diverse coalition which counts the RAA among its members, has issued its first email newsletter, Smartbites, about the National Flood Insurance Program. Click here to read the newsletter. Later editions of Smartbites will will focus on other aspects of environmentally responsible, fiscally sound approaches to natural catastrophe policy and promoting public safety.

posted November 5th, 2009

Congress Extends National Flood Insurance Program.....Again

With healthcare and regulatory reform legislation a priority, Congress has been unable to enact a longer term extension of the National Flood Insurance Program. So once again, the program, which was due to expire October 31 (that date an extension of an extension), was extended again until December 18, 2009. Industry groups are pressing for a longer term extension, with reforms that would hike coverage limits and make business interruption insurance available. A bone of contention has been whether or not to include wind as a covered peril in the program, something the RAA opposes.

posted November 4th, 2009

ReUnder40s Group Hosts Panel on Managing Capital

The ReUnder40s Group will host a distinguished Panel on Managing Capital in Today's Insurance/Reinsurance Marketplace at its December 1, 2009 meeting. Panelists include Scott Belden, John Doucette, Mark Lyons, Michael Millette, Stanislas Rouyer and Steve Weisbart. The meeting will be held at Towers Perrin, 335 Madison Avenue, 21st Floor, between 43rd and 44th Streets, from 6:00-9:00 p.m. Click here to view the invitation.

posted November 4th, 2009

Arrow Re Joins the RAA

Arrow Capital Reinsurance Company, a Bermuda-domiciled reinsurer, has joined the RAA as a life re member. Arrow Re is a wholly-owned subsidiary of Goldman Sachs.

posted November 4th, 2009

House Committee Postpones Consideration of the Federal Insurance Office Act

The House Financial Services Committee has postponed consideration of H.R. 2069, the Federal Insurance Office (FIO) Act of 2009 because the House Ways and Means Committee has weighed in, expressing concern with the latest draft of the legislation which advocates a strong role for the Treasury Department to negotiate international insurance agreements and have the ability to preempt state law related to these agreements. The RAA supports the legislation as currently drafted because it would empower the FIO to address an issue critical to the reinsurance industry--the ability of the United States to enter into meaningful, enforceable international insurance agreements on prudential measures. The RAA has sent a letter of support for Treasury's role to Michael Barr, Assistant Secretary of Financial Institutions at Treasury. On the other side, the National Association of Insurance Commissioners strongly opposes the draft legislation as written, and has sent a strongly worded missive to members of Congress.

Click here to read the draft legislation as currently written; click here for the RAA's letter to Michael Barr; click here for the NAIC's letter to Congress.

posted November 4th, 2009

Sieverling Addresses the Illinois CPA Society's Insurance Conference

Joe Sieverling, Senior Vice President and Director of the RAA's Financial Services, was a featured speaker at the Illinois CPA Society's 2009 Insurance Conference on October 23rd in Chicago. His remarks covered the NAIC's reinsurance regulatory reform; Issue Paper No. 137 Runoff Reinsurance Proposal; New York contract certainty; IRS Rev. Ruling 2008-15 (Cascading Federal Excise Tax); IRS Private Letter Ruling under Section 845; and the Neal Bill (Reinsurance Tax Legislation). Click here for a copy of his Power Point presentation.

Click here to read the presentation

posted October 23rd, 2009

RAA Opines on Natural Disaster Financing

Dennis Burke, VP of RAA's State Relations, addressed natural disaster financing at a recent meeting of the Georgia Insurance Information Service. Speaking on behalf of the RAA, his presentation highlighted the benefits of reinsurance and and the need for industry participants to seek legislative and regulatory reform to enable insurers to underwrite and achieve risk appropriate rates. The presentation highlighted how subsidies imbedded in insurance premiums distort appropriate public policy and consumer decision-making about mitigation, and he called on the industry to support risk mitigation efforts. The group also heard a presentation from FEMA representatives who, at one point asked whether any attendees supported the Representative Gene Taylor (D-MS) proposal to add wind to the NFIP. Interestingly, no one was willing to voice support for the proposal.

Click here to read the presentation.

posted October 15th, 2009

P&C Trades Group Opposes Ending Health Antitrust Immunity

A group of property/casualty trade groups, including the RAA, came out swinging against proposed Congressional legislation that would end antitrust exemptions for healthcare insurers as long provided for under the McCarran-Ferguson Act. The group charges the proposed legislation, the Health Insurance Industry Antitrust Enforcement Act of 2009," is an attempt to radically rewrite the antitrust laws for a certain segment of the insurance business," and further, that the bills have "no consumer benefit while causing enormous marketplace disruption that might have the perverse effect of discouraging new market entrants."

Click here to read the joint trades letter.

posted October 9th, 2009

Kanjorski Introduces Federal Insurance Office Act of 2009

Rep. Paul Kanjorski (D-PA) has introduced the Federal Insurance Office Act of 2009, which acknowledges that international aspects of the insurance and reinsurance business require federal involvement to address the needs of the U.S. market and assist and support U.S. companies doing business abroad. The RAA, represented by David B. Atkinson, Executive Vice President of the Reinsurance Group of America (RGA), the largest U.S.-based life reinsurer and a member of the RAA, will testify at a hearing of the House Financial Services Committee on Tuesday, October 6, in support of Kanjorski's bill.

Read the RAA's testimony.
Click here for the witness list and prepared testimony.
Click here for Williams & Jensen's hearing report.

posted October 4th, 2009, updated October 9th, 2009

President Signs NFIP Extension

The Senate voted to extend the National Flood Insurance Program through October 2009 after lawmakers failed to reach consensus on proposed reforms for a longer-term extension of the program. The sticking point remains whether or not to include wind as a covered peril in the program. President Obama signed the one-month extension extension.

posted October 4th, 2009

RAA Introduces Reinsurance Case Law and Contract Clause Database

The RAA has combined two reinsurance caselaw reference tools into a powerful online resource. The Digest of Reinsurance Caselaw, a unique and comprehensive collection of U.S. reinsurance case law, and Reinsurance Contract Clauses-Caselaw Annotations, a broad collection of U.S. case law interpreting reinsurance contract provisions, are now a fully-integrated online database. The Reinsurance Case Law and Contract Clause Database is a research tool for attorneys, contract writers, compliance officers and brokers to quickly access summaries of reinsurance case rulings or a court's interpretation of the wording of a particular contract, or both.

Click here for more information about the database.

posted September 19th, 2009

House Passes Reinsurance Reform Act of 2009

The House of Representatives passed the Nonadmitted and Reinsurance Reform Act of 2009 by a voice vote on September 9. The legislation, introduced by Reps. Dennis Moore (D-KS) and Scott Garrett (R-NJ), seeks to eliminate extraterritorial application of state laws and promote more efficient solvency regulation of reinsurers. Click here to read the RAA's press release.

posted September 9th, 2009

RAA Launches ReUnderwritingSkills Website

The RAA has launched ReUnderwritingSkills.net, a repository of training and reference resources to assist reinsurance underwriters in their professional development. Skills currently covered include:

Actuarial Pricing Concepts and Methodologies
Business and Tactical Skills
Legal and Regulatory Environment
Primary Underwriting Knowledge
Understanding Reinsurance Contracts

Visit ReUnderwritingSkills.net for more information.

posted September 8th, 2009

Six Months Underwriting Results

The RAA released reinsurance underwriting results for six months ended June 30, 2009. The results show policyholders’ surplus of $65.9 billion for a group of 19 U.S. property-casualty reinsurers, compared to $72.8 billion for the same period in 2008. The group wrote $12.8 billion of net premiums during the six months ended June 30, 2009, compared to $12.7 billion for the same period in 2008.

The reinsurers’ combined ratio was 93.8%, an improvement from the 97.5% reported by a similar group of reinsurers for the six months ended June 30, 2008. The ratio is attributable to a 65.4% loss ratio.

You can get the results here.

posted August 31st, 2009

Reinsurance Education

2010 Program Schedule:

Cat Modeling
February 9-11, Orlando
ReUnderwriting
March 23-24, Bermuda
ReBasics
May 10-12, Chicago
Current Issues Forum
May 18-20, Philadelphia
ReContracts
July 20-23, New York
ReClaims
September 15-16, New York
ReFinance
October 28-29, New York