A View From The Press Box

I would like to be able to report to you today what Al Gore told a group of risk managers at this morning's client breakfast hosted by Marsh here in New Orleans during the Risk and Insurance Management Society's annual conference. Unfortunately, the former vice president and current global warming crusader declared press coverage off limits, and Marsh allowed Mr. Gore to get away with it. I can think of only one reason why a potential presidential candidate would insist on a press ban--he is ashamed to be associated with the insurance industry in general, and a firm that has been accused of bid-rigging in particular.

For the third year in a row, talk of contingency fees dominated the discussion at the Risk and Insurance Management Society's annual conference, proving that the insurance industry has yet to fully come to grips with the fallout from the probes that exposed bid-rigging and account steering among some of the biggest brokers in the country.

For NU's next column on "A Question of Ethics," we'll focus on the use of credit history to help insurers underwrite auto and homeowners policies. Credit scoring has generated tremendous controversy and put the industry on the hot seat. Is it ethical to force an unpopular rating factor on the public--particularly if critics contest the accuracy of the information, and question the disparate impact its use might have on low-income and minority groups? And what are the ethical demands made on agents and carriers in explaining the use of this factor as a rating criterion? Please file your comments here on my blog. (If you prefer to remain anonymous, that's fine--just leave your name off...But please tell me what you do in the industry--whether you are an agent, underwriter, claims, etc.)

I expected more grumbling about broker compensation when Willis CEO Joe Plumeri rejected the latest contingency bonus arrangements proposed by selected carriers, but the last controversy I expected was over "float"--the long-time practice of intermediaries collecting premiums from policyholders, only to hold onto them for 30, 60 or even 90 days before turning them over to insurers, earning investment income or putting them to some other use in the interim.

I spent a good chunk of the day in front of a video camera, answering about 80 questions related to homeowners insurance for a new consumer-oriented, how-to Web site set to launch next month. One thing I learned from the experience is how complicated insurance really is, especially for the average person, who is basically clueless about the industry and their own coverage.

While editing stories about how the National Conference of Insurance Legislators hammered state regulators for overstepping their authority by forcing National Association of Insurance Commissioners' accreditation standards down their throats, and by making policy behind closed doors, I licked my chops, ready to unload on the NAIC myself. But then I saw this week's column by my counterpart on NU's life and health insurance edition, Editor In Chief Steve Piontek, and realized I couldn't have said it better myself. So, why try? Click on to read his views and supporting material, and let us know what you think.

When I filed my blog entry the other day about how the insurance industry should launch an initiative to educate high school students about the basics of coverage, I totally forgot about the noble efforts of the Insurance Education Institute, which talked about their program in one of last year's editions of NU! Click on to read the exchange I had with their dedicated president, Larry Forrester. As Larry outlines, they do fine work, but they need more support for sure to make a dent in this problem. I will help publicize their cause as best I can. The rest is up to the industry. Sorry, Larry!

Ever since associations started giving out press attendee lists as a service to those exhibiting at their conferences, I have been inundated with phone calls, e-mails, faxes, snail-mails, overnight packages, notes delivered by carrier pigeons, the pony express, skywriting and singing telegrams from vendors, all pleading to get together with me at some upcoming meeting. It's driving me and my fellow editors crazy, and the bottom line is that I haven't agreed to meet with any of them. There are far more effective ways to get an editor's attention at a busy conference.

For those of you who loved “The Da Vinci Code,” I have a provocative question. What if someone discovered the Holy Grail and nobody cared? What if this object of obsession was left to gather dust in a museum, and no one paid it any attention? Sound as implausible as the premise of Dan Brown’s best-selling novel? Perhaps not, if you consider the insurance industry’s sad example when it comes to its own holy grail--SEMCI.

Whether they were fans of William Shatner from his days as Capt. James T. Kirk on “Star Trek,” or prefer his current, two-time Emmy award-winning role as master litigator Denny Crane on “Boston Legal,” attendees here in Orlando at the ACORD LOMA Insurance Systems Forum packed Monday’s Opening General Session to hear his words of wisdom about something the actor knows a lot about—reinventing oneself and one’s world.

New York Governor Eliot Spitzer apparently knocked some heads together and finally convinced seven insurers to cough up $2 billion to settle all remaining property insurance claims over the destruction of the World Trade Center by terrorists on Sept. 11, 2001. It's quite an achievement, and it's terrific for the industry to bring this sad episode to a close once and for all. Read on for my comments, and for full coverage of the settlement details, click here.

As a safety net, insurance not only provides coverage when routine losses occur, but for bizarre exposures, too! That fact was vividly confirmed when we asked readers for their strangest claims stories last year (click here for the full story). Once again, we ask you to share with us your most difficult and unusual claims. Contact our assistant editor, Matt Brady, by June 4 with your best war stories at mbrady@nuco.com, and feel free to post your entries here as well.

On May 15, I posted a blog entry featuring my comrade-in-arms--Steve Piontek, Editor In Chief of NU's Life & Health Insurance edition--talking about the recent challenge by state lawmakers in NCOIL to the NAIC's accreditation program and its habit of closing some of its deliberations to the public. That blog received absolutely no comment on the subject--not even an anonymous one (which is an option, by the way.) I was amazed! Could it be that you folks are simply playing CYA, afraid to anger the beast who governs your working lives?

A musical metaphor is appropriate when it comes to the work ACORD does in developing and implementing standards. In essence, the insurance industry is an orchestra, and ACORD's job is to create harmony amid the cacophony. In that scenario, the conductor for the past 30 years has been Greg Maciag, who keeps faithfully waving his baton in hopes of convincing everyone to stay in tune. I don't envy him his job.