LEXISNEXIS CONSUMER PROFILES STOLEN – LexisNexis, a leading data broker, said that identity thieves snatched the profiles of 32,000 customers. The Secret Service and the FBI are investigating. The announcement comes amid heightened scrutiny of companies that handle consumer information after ChoicePoint revealed that thieves had stolen at least 145,000 consumer profiles. 

AMERICA'S HIDDEN HEALTHCARE CRISIS - According to this report by HSS, Inc., the U.S. healthcare industry is losing upwards of $100 billion each year due to payment errors brought on by the health industry's complex billing practices, as well as by confusing regulations, both of which result in hospitals, physician offices and other care providers overbilling private insurance companies and public programs such as Medicare and Medicaid.  The complete report is available at http://www.hssweb.com.

NEW LIFE INSURANCE ALLIANCE - Insurance leaders announced the formation of the Affordable Life Insurance Alliance (ALIA), co-chaired by Jefferson Pilot CEO Dennis R. Glass and John D. Johns, Protective CEO. Other companies joining as charter members are AmerUs, Lincoln Financial, Pacific Life, Penn Mutual, North American and Midland National Life. "The purpose and mission of the Alliance is straightforward -- to ensure that American consumers have access to safe and affordable life insurance... Specifically, the Alliance seeks the adoption of a modern, principles-based approach to valuation by the National Association of Insurance Commissioners. The Alliance will support the efforts of the NAIC, the ACLI, and the American Academy of Actuaries to develop long term valuation reform." Go to http://www.affordablelifeinsurance.us for more. 

BANKRUPTCY REFORM - The Senate has passed legislation that would make it harder for people who seek bankruptcy protection to wipe away all of their debts.  The House is expected to approve the legislation, which will then go to the President for his signature.  Primary criticism of the bill centers on the lack of protection for "ordinary debtors" who are forced into bankruptcy by medical crises, job loss or divorce, as opposed to irresponsible spending, while filing to close certain loopholes still open to wealthy debtors and corporations.

PENSION FUNDING RULES - Ron Gebhardtsbauer, senior pension fellow for the nonpartisan American Academy of Actuaries, told a House Ways and Means subcommittee that Bush administration proposals to overhaul pension funding rules could prompt companies to freeze or terminate their retirement accounts, an outcome to be avoided.  The organization also presented an analysis detailing major reforms to strengthen defined benefit pensions.  To view the analysis, go to http://www.actuary.org.

PROGRESSIVE STOCK UP 1.5%; CEO PAY UP 40% - Progressive paid its CEO, Glenn Renwick, $10.5 million in 2004, a 40% increase for the same period that its shares rose 1.5%. Well, at least he didn't bankrupt the company and walk away with millions as some other CEOs have done. 

MOMENTUM FOR TRIA - The Big "I" and the American Insurance Association see the introduction of new legislation in Congress as a good sign for the extension the Terrorism Risk Insurance Act. 

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PBGC TAKES UNITED AIRLINES PENSION - The Pension Benefit Guaranty Corp. is moving to take over an estimated $2.1 billion of bankrupt UAL's pension plan for ground employees, which was only 30% funded.  The plan is underfunded by $2.9 billion. The plan has more than 36,000 active and retired employees. Benefit payments for retirees will be reduced and current employees will receive a new, cheaper pension. 

TORT REFORM QUESTIONED - A study conducted by law professors at the University of Texas, University of Illinois and Columbia University law schools casts doubt on whether recent "tort reform" in Texas that limited payouts in medical malpractice lawsuits and is similar to what President Bush wants nationally was really needed. "We find no evidence of the medical malpractice crisis that produced headlines over the last several years and led to legal reform in Texas and other states."  More information is available here.

AIA CALLS FOR FLORIDA TORT REFORM - In survey results released today, corporate America ranked Florida as having the 42nd worst legal environment in the country. The survey, conducted annually by the U.S. Chamber of Commerce, underscores the urgent need for the Florida Legislature to pass tort reform legislation during its session that begins today, said the American Insurance Association (AIA). See complete story at http://www.aiadc.org.

AON SETTLEMENT – Aon, the world's second largest insurance broker, agreed to pay $190 million to settle a bid-rigging probe by three states (Connecticut, Illinois and NY), and its chief executive apologized for its conduct and pledged reforms.  The settlement is in response to charges that Aon secretly accepted hundreds of millions of dollars to steer clients to favored insurers.

NATIONAL FINANCIAL PARTNERS ACQUIRES HIGHLAND CAPITAL - National Financial Partners will acquire Highland Capital. Highland Capital is NFP's largest acquisition to date and represents a network of 21 brokerage general agent (BGA) offices with combined revenues of approximately $62 million in 2004. Approximately 45% of Highland's life insurance production is from the institutional market, including national and regional banks, trust companies and broker/dealers. NFP has agreed to pay up to $48.4 million in a combination of cash and NFP common stock to holders of Highland debt, preferred stock, options and common stock.

SEC WANTS MARKET OVERHALL - SEC Chairman William Donaldson said the SEC would welcome congressional attention to whether credit rating agencies should come under tighter government oversight and called for "a top-to-bottom assessment" of public disclosures by mutual funds of trading and administrative costs.

AIG, BERKSHIRE DEAL PROBED - Investigators are looking at whether a deal between Berkshire Hathaway's General Re and AIG transferred sufficient risk for AIG to account for it as an insurance policy. This could be trouble for two of the most powerful men in insurance...Maurice "Hank" Greenburg of AIG and Warren Buffett of Berkshire Hathaway.

PRINCIPAL COMPENSATION AGREEMENTS - The Principal just received a subpoena from the Office of the Attorney General of the State of New York seeking information on compensation agreements associated with the sale of retirement products. This could be the beginning of a closer scrutiny of the compensation plans of insurers who are active with small to medium sized investors.

RETIREMENT ALPHABET SOUP – LSAs...RSAs...ERSAs...those are the acronyms for a package of retirement savings bills introduced in Congress.  LSAs, or Lifetime Savings Accounts, would allow contributions of up to $7,500, which would grow tax free in the account; distributions could be taken at any time for any reason.  RSAs, or Retirement Savings Accounts, would phase out regular IRAs and make these new accounts the equivalent of a Roth IRA, but with a $7,500 contribution limit and no income limits.  ERSAs, or Employer Retirement Savings Accounts, would make it simpler and less costly for businesses to establish and operate 401(k)-style plans.  NAIFA has expressed concern with LSAs and RSAs...with no distribution requirements, LSAs "are a prescription for lifetime spending instead of lifetime savings."  When LSAs are combined with RSAs, a business owner could put away up to $15,000 per year, but NAIFA is concerned that this would then undercut any incentive the owner has to establish retirement programs for employees.

SEEK AND YOU WILL FIND - A new survey by American Express Financial Advisors finds that those who seek help in retirement planning from a financial advisor save nearly twice as much for retirement compared to those who don't seek advice. The survey also found that the advised group reported less anxiety, worry and uncertainty about their future retirement years than those who chose to go it alone without professional advice. When asked how much savings they think is needed to maintain their current standard of living in retirement, the unadvised reported a perceived need for twice the amount reported by advised boomers. The advised group expects to need about $2.5 million to maintain their current lifestyle in retirement and, on average, they report about $1.8 million in savings – a gap of $700,000 between financial need versus savings.  The non-advised group expects to need $3.5 million to maintain their current lifestyle in retirement and, on average, they report having about $950,000 in savings – a gap of close to $2.6 million.  More on the survey is available here.

TERM-ONLY LIFE LICENSE? - The National Association of Insurance and Financial Advisors (NAIFA) says it will oppose any state legislation that would create what it calls a "second-class" license to sell term life insurance.  "NAIFA is opposed to the proposals primarily because they don't serve the best interest of the consumers. Rich or poor, consumers need to understand the wide range of insurance products available before making a buying decision. A fully licensed life insurance agent can help find a solution that best suits that individual's needs and circumstances. An agent licensed to sell just one product can't. Consumers deserve better." 

GAINING PERMISSION - There are approximately 167 million phone numbers in the United States and currently 62 million consumer phone numbers are registered on the National Do Not Call List. Is it possible to gain explicit permission to be contacted in the future - and be compliant with Do Not Call legislation - without putting an end to outbound telemarketing efforts? Yes, it is - and this is the subject of a white paper published by Authtel Permission Solutions. The "Gaining Permission" white paper is available upon request via e-mail to jim@authtel.com.

BAD BENEFIT TREND – In order to save $500 million, Delphi, the world's largest auto parts supplier, will stop paying medical insurance in 2007 for 4,000 retired salaried workers and thousands more future retirees.

REDUCED RETIREE BENEFITS - The Wall Street Journal reports that in the wake of rising premiums, companies are increasingly cutting benefits on retirees' health plans by excluding new dependents or reducing coverage amounts for retiree's current dependents.  A reported 79% of large employers also reported increasing retiree contributions to premiums in the last year. 

LTC TAX DEDUCTION – A bill that would let taxpayers deduct the cost of long-term care insurance has been introduced in the Senate.  Perhaps we should say re-introduced since a similar bill failed last year despite strong bipartisan support.

TELL US WHAT YOU THINK – That's the word from the SEC, which is asking for public input on its variable annuity disclosure form and rules.  More information is available here.

TELL US WHAT YOU THINK PART II - The IRS has proposed regulations covering the addition of Roth IRA accounts to 401(k) plans beginning next year and is also asking for public comments.  If you're interested, click here.  Warning:  Neither of the above requests for comments is for the faint of heart!

ID THEFT INSURANCE - For about $30 a year, Allstate policyholders can add identity theft coverage to their homeowners or renters insurance policy. The new plan has no deductible and pays up to $25,000 for covered expenses. Expect other carriers to offer this in the future.

AMERICANS 65+ DEPEND ON SOCIAL SECURITY - The MetLife Mature Market Institute Demographic Profile of Americans 65+ shows an aging population of 36 million people, some with few assets and relatively low income; 10% live below the poverty line. The publication reports the segment of the population between 65 and 69 has a median net worth of $114,000, including the equity in their homes, but $27,588 without it. For those between 65 and 74, the average before-tax income is $35,118 with most coming from Social Security. Of the entire 65+ population, 80% own their own homes and 20% are renters. Not surprisingly, the lion's share of the 65+-age group's expenditures is for basic necessities such as housing, food, transportation and health care. Those over 75, for example, spend just $896 per year on entertainment.  "This is alarming data, particularly with regard to the future. Our report shows that the 65+ population comprises 12.6% of the current population -- one in eight people -- and that the ranks will double to about 71.5 million people by 2030; by 2050 there will be 86.7 million people over 65." See more at http://www.maturemarketinstitute.com.

RETIREES REGRET POOR PLANNING – According to a recent poll conducted by mutual fund company Fidelity Investments, half of retirees regret poor planning. Did that really require a poll? We are surprised that 100% didn't regret poor planning! 

AFFORDABLE HEALTH COVERAGE - A new group plan being put together by 60 Fortune 500 companies is designed to offer affordable health insurance to employees.  The hope is that the coverage will help cut turnover rates for lower-wage workers.  The program is called National Health Access and expects to attract insurers willing to offer coverage at affordable rates.  Some additional information on the program is available here.

ONLINE CUSTOMER SATISFACTION - The Customer Respect Group has issued rankings on how financial services firms treat their online customers.  The results can be found here. 

LIFE POLICIES FOR HIV PATIENTS - The Dutch Association of Insurers reports several Dutch insurers will start offering life insurance policies to certain people suffering from HIV. The basis for the change is the significant increase in life expectancy of people treated with a combination of drugs called highly active antiretroviral therapy (HAART).

MORTGAGE RATES UP – According to Freddie Mac, interest rates on home mortgages rose to their highest levels since last August. However, they are still low...the 30-year mortgage rate average was just 5.85% last week.

PRAISE FOR NEW LIFE SETTLEMENT LAW – A new Kentucky law makes settlement transactions more secure and more accessible to Kentucky consumers. A key provision recognizes the authority of professional advisors who hold a life insurance license to advise and assist policyowners with life settlement transactions. These advisors must notify the Department of Insurance of their activities and must also affirm that they will follow the settlement laws. Details at http://www.lifeinsuranceconsumers.org.

AUTOMOTIVE "BLACK BOX" DATA - State and federal legislators are rightly concerned with protecting the privacy of their constituents' financial and medical information, but bills to prevent access to vehicle collision data from Event Data Recorders (EDRs), now under consideration in 10 states, may cause more harm than good, according to the Property Casualty Insurers Association of America. 

EXPENSIVE CARS, CHEAP INSURANCE - With a few insurance companies heavily advertising low prices and the ability to get quotes over the Internet, many people have become more price-conscious when purchasing auto insurance. But choosing the lowest price could end up costing consumers a lot more if they have an accident, especially if they own a high-end auto, warns Atlantic Mutual. The company is offering a free list of questions to ask when obtaining auto insurance quotes at http://www.atlanticmutual.com.

DANGEROUS DOGS - If a Washington State measure becomes law, responsible pet owners who take care of their animals will face higher insurance costs to subsidize rates for others with dogs more likely to bite, says the American Insurance Association (AIA). AIA is urging members of the Washington House to vote no on the measure to limit an insurer's ability to underwrite homeowners insurance based on a specific breed of dog.