Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!usa-post Newsgroups: usa-today.insur From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: insur Wed, Mar 25 1992 Date: Wed, 25 Mar 92 05:43:34 EST Message-ID: 03-25 0000 DECISIONLINE: Insurance USA TODAY Update March 25, 1992 Source: USA TODAY:Gannett National Information Network N.J. INSURERS TO PAY $170M: New Jersey Insurance Commissioner Samuel Fortunato Tuesday rejected another rate increase for 1 million drivers in the state's high risk insurance pool and instead ordered 50 insurance companies to pay $170 million in penalties. Fortunato said the companies have failed to abide by legal deadlines that require them to provide lower standard rates to nearly 500,000 good drivers in the pool. (For more, see special New Jersey package below.) TEXAS FIRM INVESTIGATED: The Texas attorney general has filed lawsuits charging Employee Benefits Administrators with unfair and deceptive business practices. EBA sold insurance without a license in Texas, sold invalid policies, forged signatures on applications, failed to deliver premiums it collected and misrepresented its relationship with insurers, according to the lawsuits. FRAUD BOOSTS PREMIUMS: Fraudulent insurance claims are adding 10% to the cost of home and auto insurance in Colorado, industry experts say. Blamed: Hard economic times; and a "leak" in the no-fault law that encourages inflating medical costs. BANKS PREPARING FOR INCREASE: Banks are bracing for another increase in the premiums they pay for deposit insurance. When the Federal Deposit Insurance Corp. raises premiums, banks pass at least part of the cost to customers. The premiums are supposed to finance the FDIC fund that pays off depositors when banks fail. FDIC COSTS PASSED DOWN: To pay the Treasury back, the FDIC is expected by summer to raise bank premiums to 30 cents for every $100 in deposits, from 23 cents. Premiums have risen three times since 1989, after having been at 8.3 cents for the previous 54 years. A survey by accountants Deloitte & Touche showed half of banks cover higher FDIC payments by raising consumer fees. TRUCKS USING RADARS: According to a recent study by the Insurance Institute for Highway Safety, 37% to 52% of heavy trucks were using radar detectors and exceeding posted speed limits. At least 46% of the trucks were carrying hazardous materials. CRIME TAKES BITE OUT OF USA: Nearly 24% of households across the country were victimized by a rape, robbery, assault, theft, burglary or auto theft in 1990, according to U.S. Bureau of Justics Statistics. Five percent of all households experienced at least one completed or attempted burglary; 17% a completed or attempted theft. NAIB CONFERENCE COMING UP: The deadline for registering for the National Association of Insurance Brokers' 1992 Annual Conference is April 3. Managing Change in Trying Times is the theme for the 58th Annual Conference, which will be held May 3-6 at The Lodge at Pebble Beach, California. For registration information, please call the NAIB's Anne Riser at 202-628-6700. TRAFFIC DEATHS ALCOHOL-RELATED: Nearly half of the 44,529 traffic deaths in 1990 were alcohol-related, amounting to one such death every 24 minutes, say health officials. Other research reported to the conference sponsored by the U.S. Department of Health and Human Services found that alcohol is involved in nearly half of accidental deaths at home and between 20% and 37% of emergency room traumas. SPECIAL PACKAGE ON NEW JERSEY: ALLSTATE HAS HIGHEST FINE: Companies with the highest fines include Allstate, $39 million; the Cigna Group, $17 million; Continental Group $16.5 million and Liberty Mutual, $15 million. The decision is certain to launch yet another round of courtroom battles between the administration of New Jersey Gov. Jim Florio and the insurance industry. Insurance companies said they would contest Tuesday's ruling. MTF WANTED ANOTHER INCREASE: Fortunato said that hundreds of thousands of drivers remain in the high risk insurance pool, called the Market Transition Facility, and they should be covered by these companies. Fortunato was considering a request from the MTF to increase rates an average of 16.8% for all of the facility's policyholders. This would have been in addition to the 14.9 average increase Jan. 15. MTF MUST HAVE PLAN BY APRIL 1: Fortunato said the MTF will need to boost its revenue by about 12.6%, which will come from the assessment against the companies. He also ordered that the MTF devise a plan by April 1 to eliminate surcharges for drivers who have three or fewer motor vehicle points and no at-fault accidents in the last three years. FINES ASSESSED IN TWO WAYS: The fines will come in two steps, the commissioner said. First, the companies will be assessed $180 for each driver it failed to take from the MTF from the period October 1990 to October 1991. This will total about $132 million. Second, the companies will be assessed another estimated $37 million for not making their quotas for April 1, 1992. (End of package.) Insurance Editor: Michele Coleman. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM