DEMUTUALIZATION NEWS – Phoenix Home Life has decided to pursue conversion to a stock company.  The demutualization plan is expected to be mailed to policyholders in February.  If approved by two-thirds of policyholders and the New York State Superintendent of Insurance, the reorganized company will be renamed Phoenix Life Insurance Company.  Over at Prudential, an IPO plan is expected to be submitted to regulators and policyholders that will result in the company's IPO by October, 2001.  The plan to distribute stock to 12 million policyholders will likely make Prudential the most widely-held U.S. stock.

WALL STREET SECURITY – Prudential Securities will cut 160 jobs at its investment banking unit as its parent company prepares to go public. Its investment banking arm will focus on research for individual and institutional investors, rather than on initial public offerings. Many Wall Street workers will be out of a job despite a record year for bonuses and securities industry profits. Merger partners J.P. Morgan and Chase Manhattan announced last week they will eliminate 5,000 jobs.

AETNA CUTS – Less than a week after completing the sale of its financial services and international businesses to ING, Aetna announced plans to cut 5,000 jobs, or about 12.5% of its work force, as part of a plan to save $200 million in 2001 as it focuses on its health insurance operations.  The company also plans to eliminate unprofitable business by withdrawing from Medicare coverage in some markets and ending HMO offerings in some areas.  Health insurance plans renewing after the first of the year can also expect what the company calls "significant price increases."
 

RESIGNATION – SEC chairman Arthur Levitt has announced plans to step down in early February.  As the longest-serving SEC "top cop" (nearly eight years), Mr. Levitt earned a reputation for trying to protect and help educate millions of individual investors, while at the same time policing Wall Street.

PRIVACY REGULATIONS – On December 20, 2000, the Department of Health & Human Services issued a 1,500 page document containing final privacy regulations for health information.  The regulations will go into effect in February, 2003, with small health insurance plans given an additional year to comply.  Under the rules, patients could sign a one-time consent form allowing disclosures for routing matters like billing and treatment, but would have to explicitly authorize most other uses of their records.  Patients will also gain the right to inspect and request corrections to their records, and employers will be barred from reviewing medical information about their employees unless it's directly related to providing health care.  When Congress passed the Health Insurance Portability and Accountability Act of 1996, it gave itself three years to pass privacy legislation, stipulating that HHS could write the regulations if it failed.  Despite this provision, Congress could still overturn the recently-released regulations or President-elect Bush could issue new regulations. 

NEBRASKA MERGER – Lincoln Mutual Holding Company and WFR Mutual Holding Company, both in Lincoln, Nebraska, will consolidate to form Lincoln Insurance Group. The move will join Lincoln Direct Life and Woodmen Accident and Life Company.