LAWYERS' DELIGHT - Allowing more people to sue their managed care plans for punitive damages may be popular, but it will also pad the pockets of trial lawyers while boosting health insurance premiums. A commentary in the January 27^th issue of The New England Journal of Medicine states that little good can come of the use of punitive damages in jury awards against managed care plans and could lead to a "liability crisis" in managed care.

EXPEDITED APPEAL - State Farm has asked the Illinois Supreme Court to expedite State Farm's appeal of the $1.2 billion verdict against it in last year's generic auto parts lawsuit. The motion asks the court to bypass the usual appeals process and consider State Farm's appeal directly.

"BIG MUTUAL" IPOs - Investors gave John Hancock (NYSE: JHF) a lukewarm welcome to the stock market, as the first of the big three mutuals launched its IPO. Unlike the recent Internet "high flyers," Hancock opened at $17-3/4, rose slightly and fell back to $17. Prudential is expected to come to the stock market near the end of the year, while MetLife will offer its record-breaking $6.5 billion IPO in March. "MetLife is going to suck the oxygen out of the new issues market for this sector, and also impinge on Prudential's deal," said David Menlow, president of IPOfinancial.com. He also described the insurance IPOs as "difficult sales," since few investors want to deal in the real world, as compared to the current Internet-dominated IPO market.

METLIFE ACQUISITIONS - MetLife has reached agreement to acquire the Group Workplace Benefits Division of BMA (Business Men's Assurance Company). Under the agreement, MetLife will gain $100 million of group life and long- and short-term disability premiums, together with an increase in its small group sales force. MetLife has also offered to acquire the Conning Corp. shares it doesn't already own (MetLife acquired about 61% of Conning's stock when it purchased General America).

SEC PROBE TARGETS WMA - That's a headline from the 1/17/2000 Investment News. According to the article, the SEC probe is intended to determine if past WMA problems with state regulators "involved violations of federal securities laws." The same article also reports that Northwestern Mutual has "warned its agents to steer clear of an investment being hawked by the firm, WMA Securities Inc. of Norcross, Ga." In an internal newsletter, Northwestern Mutual maintains that "WMA has been marketing insurance policies to agents that could snare purchasers and their home mortgages in a 'perpetual loop of debt.'" The product in question is WMA's "Prime Assets Home Loan."

TILLINGHAST-TOWERS PERRIN PREDICTIONS - Tillinghast's recent survey of CEOs from the fields of investment management, banking, life insurance and property/casualty insurance shows widely varying views on key issues about the future. Most of the insurance executives see the Internet as a means of educating and servicing customers, but not a vehicle for product sales. On the other hand, most of the banking and investment management CEOs see the Internet as a major channel for sales. One Tillinghast consultant feels part of the discord is caused by product..."Simpler financial products, those that are essentially commodities, are most likely to be sold online, but many life insurance products are more complex and require a greater level of human interaction and counseling." Other key findings:

• Supermarket approach: CEOs are less confident about the future of companies that try to be "all things to all people."
• Distribution methods: Most see a multiple-channel model.
• Role of advice: Vast majority believe that advice, planning and counsel will grow in importance.
• Product opportunities: They expect a dramatic increase in companies offering "nontraditional" products; banks offering all types of insurance products and insurance companies offering traditionally bank and investment products.
• Retailing versus product manufacturing: Most do not see their companies choosing retailing or wholesaling, but will continue to integrate both.
• Sales charge disclosure: Most of the investment management and banking CEOs think that charges will be disclosed to consumers at the point of sale, but fewer of the insurance executives see this in the future.

PRIVACY PROTECTIONS - In a settlement with New York's attorney general, Chase Manhattan Corp. has agreed to obtain express written consent from account holders before selling their names to outside marketers. Consumers Union hailed the agreement, but noted that other banks and other financial institutions may need to be "compelled by states to tighten their privacy policies."

MORE ON UNICOVER MESS - Reliance Group has filed a lawsuit against Unicover Managers, Inc. for alleged insurance fraud. The worker's compensation reinsurance debacle is likely to cost Reliance $100 million. The cost to several insurers could total $2 billion, including $40 million to Lincoln National, $275 million to Cologne Re (ultimately owned by Berkshire Hathaway), $134 million to John Hancock, $700 to $900 million to Sun Life of Canada and up to $500 million to Phoenix Home Life.

LOMA'S OUTLOOK - LOMA is an international association of life and health insurance companies and other financial institutions, with a board composed of key executives from the industry. Their board reports that consolidation, distribution and product development are the places the insurance industry will see the most change in 2000 and beyond. Banks will buy insurance companies and vice versa, companies will no longer be able to rely on a single form of distribution, products will focus on asset accumulation, traditional life products will decline, term life will continue to be important and LTC sales will grow. More at the LOMA Web site (http://www.loma.org).

DECIMALIZATION - The SEC has ordered the nation's stock exchanges to begin quoting at least some stock prices in dollars and cents by July 3 and to be fully "decimalized" by the end of the year.