Dennis R. Glass

The life insurer’s move, after discussions with the U.S. Office of Thrift Supervision, follows a similar action by Hartford Financial Services Group in March.

The shares were issued to the U.S. Treasury under the Treasury’s Capital Purchase Program (CPP).

Lincoln Financial intends to repurchase the $950 million of preferred shares with net proceeds from a $335 million common stock offering, net proceeds from a $250 million senior notes offering and cash currently held at the holding company. In addition, net proceeds from a senior notes offering of up to $500 million will be used as part of a long-term financing solution supporting universal life reserves of Lincoln Financial’s insurance subsidiaries, the company said.

“We appreciate the critical role the government and the American taxpayers have played in stabilizing the financial markets and we are pleased to announce a plan to repurchase Treasury’s investment sooner than originally anticipated,” said Dennis R. Glass, president and chief executive officer. “Lincoln Financial always viewed this investment as temporary capital and intended to return it as soon as it was prudent.

“As we have said, we ended the year in a strong capital position, and our first quarter results reflected the strength of our business model. The repurchase of the CPP preferred shares combined with securing long term financing for a portion of our life insurance reserves completes a series of capital initiatives in support of our strong ratings and gives us additional financial flexibility as we look to invest in our core businesses.”

The federal government continues to hold warrants to buy 13 million shares of Lincoln Financial at $10.92 per share, but Lincoln does not intend to repurchase them.

Lincoln National Corp. to give U.S. back $950 million from stock offering via IFAwebnews.

Medmarc said the new approach means it can offer clinical trial-stage companies and emerging growth enterprises claims-made products liability protection at a lower fixed annual cost.

Medmarc’s minimum premium for policies offered to these companies has been reduced up to 30% and now contains no audit provisions, the company said. In addition, the extended reporting provision (tail) available to clinical trial stage companies contains a one-year period at no cost, a maximum charge of only 100% of the policy premium and a waiver of the self-insured-retention (SIR).

The policy also includes blanket clinical trials and compassionate-use coverage and coverage of medical expenses of clinical trial test subjects regardless of fault at no charge. The limit of protection is $10,000 for each test subject.

Created in 1979 by the healthcare technology industry, Medmarc provides liability insurance protection and related risk management solutions and to support the development, testing and delivery of products that save lives and improve the quality of life. Through strategic alliances with The Hartford Financial Services Group and Biomedic-Insure, Medmarc policyholders have access to all-lines property and liability insurance protection, loss prevention services and claims management services specifically for medical technology and life sciences companies worldwide.

Va. insurer’s new approach lowers clinical trial coverage rates via IFAwebnews.

Richard Cordray

Ohio Attorney General Richard Cordray announced the settlement linked to claims AIG conspired with Marsh & McLennan and other insurers to eliminate competition in the state’s commercial casualty insurance industry.

A suit filed in Cuyahoga County Common Pleas alleges that the insurers agreed to provide customers with fictitious quotes to create the false impression that competitive bidding had resulted in the best possible price during a period of 2001 to 2004.

Through the settlement agreement, AIG denied the allegations and did not admit liability.

“We have settled to avoid the expense and uncertainty of protracted litigation concerning events from 2004 and earlier,” AIG spokesman Mark Herr told IFAwebnews.com by email. “This will allow us to continue to focus on strengthening our businesses and repaying the American taxpayer.”

While AIG has settled the matter, Cordray’s office said the case will continue against Marsh, ACE American Insurance Co., The Chubb Corp. and Hartford Financial Services Group.

In a statement, Cordray said “the scam in play here” is yet another example of “the all-consuming corporate greed that has been so prevalent on Wall Street.

“This scheme caused premiums to go up and ultimately cost Ohio public schools, universities, pension funds and others millions of dollars,” he said in a statement. “While this is a good settlement for Ohio, we’re not done. We will continue to aggressively pursue our claims against the remaining defendants in this case.”

Settlement distribution

Cordray’s office said within the next month, more than $3 million of the settlement funds will be distributed to the 26 entities represented in the case. Exactly $4 million from the settlement will be put aside in a fund to be distributed by the court once the anti-trust case has been completely resolved.

Among the largest recipients of the settlement dollars are: The Ohio State University ($1.2 million); the Ohio Public Employees Retirement System ($383,834); the Columbus Regional Airport Authority ($209,444); and the City of Cincinnati ($207,661).

Each of the 26 public entities is to receive 10% of what was paid in commercial casualty insurance premiums brokered through Marsh over the three-year span of the alleged scheme. Additional funds will go to the state’s Antitrust Resolving Fund for enforcement ($805,000), the Ohio Attorney General’s Office for litigation costs ($850,000) and to the Ohio Department of Insurance for investigative costs ($100,000).

Cordray is also involved in a class-action securities fraud suit against AIG representing several Ohio public pension funds.

Regarding the pension fund dispute, Herr said AIG has already paid $800 million to an U.S. Securities and Exchange fund to compensate investors. That amount, he said, is “almost three times what all the other defendants in the action have agreed to pay combined.

“Any additional payments would come at the expense of the American taxpayer and would enrich the plaintiffs’ lawyers litigating these claims,” Herr added.

AIG to pay $9 million to settle antitrust allegations in Ohio via IFAwebnews.

Christopher J. Swift

The Hartford, Conn.-based company announced the hire of Christopher J. Swift, as both CFO and executive vice president, effective March 1. At ALICO, Swift served as vice chairman and CFO of the global life company, which media reports indicate will soon be sold to MetLife.

The Hartford’s current CFO, Lizabeth Zlatkus, will assume the role as the company’s chief risk officer March 1.

The Hartford’s chairman, president and chief executive officer Liam E. McGee said in a statement that the appointment is “an important step on our path forward,” noting Swift’s leadership roles in “large, complex financial organizations” and experience in both the life and property-casualty markets.

“In addition to his strategic financial role at ALICO, Chris had a broad range of functional responsibilities, including capital management, and was instrumental in the company’s repositioning,” McGee said in a statement. “He will be an excellent addition to our leadership team.”

Swift, 49, began his career as an auditor in the Chicago office of KPMG focusing on financial services, rising through the ranks to become partner by age 32.

He has also served executive roles with Conning Asset Management, a subsidiary of General American, returning to KPMG in 1999 when MetLife acquired Conning, eventually becoming head of global insurance industry practice for both the life and property-casualty markets.

At ALICO, which operated in 54 countries as an operating company of American International Group, Swift oversaw the unit’s global financial operations.

He said he is “honored and thrilled” to join The Hartford, which he called an “iconic American company with a long and proud history, a powerful brand, strong franchise and great people.”

The Hartford names former AIG life executive to CFO post via IFAwebnews.

The settlement, whose financial terms were not publicized, involves the administrators of all 401(k) plans that used Hartford Life Insurance Co. as a full-service provider to design, implement, administer or assist in the administering of their 401(k) plans since Nov. 14, 2003, according to a statement from Shepherd, Finkelman, Miller & Shah, a law firm involved in the case.

The suit was filed Nov. 14, 2006, on behalf of Phones Plus Inc. against The Hartford Financial Services Group, Hartford Life Insurance Co. and Neuberger Berman Management alleging that the parties entered into revenue-sharing agreements and arrangements with various mutual funds, as well as among themselves, in violation of the Employment Retirement Income Security Act (ERISA), according to the law firm.

In December 2007, The Hartford filed a third-party complaint against Thomas Sodemann, a trustee and fiduciary of the Phones Plus Retirement Savings Plan, and as an officer and director of Phones Plus.

The law firm is now seeking people who were affected so they may participate in the settlement, records show.

Federal court approves 401(k) settlement involving Hartford Life via IFAwebnews.

Large insurers that own banks and that also took no TARP money will be accessed fees to shore up the program, a money grab that President Obama believes is owed to America.

“We want our money back and we’re going to get it,” Obama said while announcing the Financial Crisis Responsibility Fee.

This misguided legislation would require firms that accepted and repaid TARP funds — and those that accepted none — to pay the fee. Firms affected include Prudential, Allstate, Lincoln National, AIG, Principal Financial and Hartford. Prudential and MetLife, for example, which never took TARP money, would each be forced to pay an estimated $85 million and $81 million, respectively.

One analyst, however, sees the fees as a plus, as it would make large insurers less competitive and enable smaller insurers to compete more effectively in specialized markets.

Obviously, Mr. Obama and his Democrat Congress has nothing but the best in mind for America and the U.S. economy.

Insurers that don’t need bailout funds will still pay through the nose via IFAwebnews.

Publicly traded life insurance companies are in a period of “transition,” from which they will emerge with significantly improved capital and attractive valuations, as well as better sales in some lines, and higher investment income and fees, said Jeff Schuman, Keffe, Bruyette & Woods’ lead life insurance analyst, in his analysis of the sector.

The capital and liquidity cushions many life firms built in 2009 should buffet them from the remaining baseline credit loss expectations for this year, Schuman said. Those cushions also create future earnings potential. The analyst said he anticipates that companies will invest excess cash balances as a means of boosting their earnings further.

Average operating revenue growth, after falling 1% in 2008 and an estimated 2% in 2009, should rise by an estimated 2% this year. That 2% median revenue growth should translate to an 8% median growth in earnings per share for life insurers, driven by operating leverage, better pricing and, for some, capital management, Schuman predicts. His 2011 estimate is that the median earning per share could rise 11%, fueled by better sales growth and more significant capital management. He also foresees an estimated 10.2% return on equity for this year and 10.9% for 2011, up from the estimated 9.7% for 2009.

Schuman’s predictions are good news to the companies who been struggling to recover from the recession for more than a year. For the first 11 months of 2009, individual life insurance application activity has been flat, according to the MIB Life Index, a monthly analysis of life sales activity. Despite a 4.1% increase in November 2009, compared to the same period the prior year, the overall life insurance application activity for the first 11 months of the year had a 0.4% overall decline, the index found.

The analyst favors Prudential Financial Inc. and Reinsurance Group of America, saying both are worthy of a “buy” recommendation. He also likes The Hartford Financial Group, Lincoln National Group as “deep-value recovery plays,” and Assurant, Delphi Financial Group and Torchmark Corp. as “attractive underwriting franchises trading at very modest valuations,” according to his analysis.

Forecast: Life insurer’s stocks show new promise via IFAwebnews.

Glenn Shapiro

The Hartford Financial Service Group performed the analysis of more than 1 million short-tern disability claims filed with the company over the last five years.

“The holiday season can be a stressful time of year. But studies show that most Americans are happy when they’re celebrating with family and friends,” said Glenn Shapiro, vice president of claims for The Hartford’s Group Benefits Division, in a statement, “Our claims records back that up. Depression claims drop to their lowest point in December and then climb in January.”

Claims spike in January, with depression, respiratory illness and fractures the leading causes, according to the analysis.

Claims for respiratory illnesses soar in January and peak in February.

Overall, accident-related disability claims peak in the summertime, according to the analysis.

However, there’s another secondary spike in January of accident-related claims for workers in the Northeast and Midwest, where weather-related incidents seem to occur most frequently.

“Inclement weather is a key factor that makes these two regions disability danger zones during the winter,” Shapiro said.

Disability insurance claims filings fall in December, rise in January via IFAwebnews.

The Hartford, Conn.-based company recently launched a new advertising campaign targeting both small businesses and consumers in an attempt to increase its marketplace visibility. The campaign includes new television spots, updated print advertising, a reinvented logo and a redesigned website, according to a statement from the company.

The 200th anniversary of The Harford has inspired the “brand refreshing effort,” which hinges on the phrase “With The Hartford Behind You, Achieve What’s Ahead of You,” a message the company hopes will highlight its optimism for the future, it said.

“Throughout this campaign, The Hartford will be broadly visible and will illustrate its energized commitment to winning in the marketplace. We are focused on our path forward and are optimistic about the opportunities ahead,” said Connie Weaver, senior vice president of marketing and communications at The Hartford, in a statement.

The Hartford will celebrate its 200th anniversary May 10, 2010, and is launching the new advertising campaign throughout the year in a variety of formats. The Hartford hopes to broaden its market appeal and build momentum with the new campaign approach, company officials said.

The Hartford to celebrate 200 years with new media launch via IFAwebnews.

Kevin McCarty

Florida Insurance Commissioner Kevin McCarty said the Hartford, Conn.-based insurer has entered into a consent agreement to return the money to state businesses for accidents in the years 2004-2006. The Hartford must provide refunds or renewal credits in the next two months and provide documentation of its compliance to McCarty’s office.

“During these tough economic times, Florida businesses will receive a very significant and important return of premium,” McCarty said in a statement. “Companies certainly are entitled to earn reasonable profits; but the excess profit law protects Florida business owners from paying more than what is actuarially justified.”

The Hartford said that during the calendar years 2004 to 2006, it generated “outstanding results” in its workers’ compensation business, qualifying customers for a pro-rata share of the $48.2 million refund, which represents its underwriting profit in excess of the allowable amount.

Florida law includes an excess profits stipulation that governs the maximum amount of underwriting profit insurers can generate over a three-year period.

Jim Ward, regional vice president of The Hartford’s Orlando, Fla., regional office, said that the insurer, “its agent and broker partners and its policyholders have long valued the importance of risk management and safety programs.”

“The combination of these loss prevention efforts, along with The Hartford’s strong workers’ compensation underwriting and risk selection in the state, resulted in lower claims costs,” Ward said in a statement. “We can think of no better testimony to the partnership achieved between our agents, policyholders and The Hartford than is reflected in the return of these funds.”

In addition to proof of compliance, The Hartford must also certify that it has attempted to locate all policyholders whose refund checks are returned, according to McCarty’s office. If the insurer is unable to locate those policyholders, the funds must be processed as unclaimed or abandoned property under Florida law. The Hartford must also pay the insurance department $5,000 in administrative costs.

The agreement with The Hartford brings the total amount of refunded excess workers’ compensation profits in Florida to more than $98.8 million this year, according to McCarty’s office. More than $29.7 million in excess profits were refunded in 2008.

The Hartford returns $48 million in workers’ comp. profits to Florida via IFAwebnews.