PATIENTS BILL OF RIGHTS - President Bush, bowing to Democratic pressure, is now urging passage of a "patients bill of rights" as one of his top three priorities for the month. "The Congress must act on a patients bill of rights, a good patients bill of rights, one that recognizes patients are important -- not lawyers," Bush said. Gallop says Americans favor a patient protections bill by 5-to-1, but who could be against a Bill of Rights?  As the President added, we cannot have a bill that encourages "frivolous and junk lawsuits that will threaten the very existence of an important health care policy in America." 

HANCOCK STOCK...GREAT START - John Hancock's stock has increased 135% since its initial public offering early last year. That is a great start, but some money mangers are now taking profits, feeling that it may have become "pricey." 

MORE STATE FARM/FORTIS DEALS - State Farm continues to build its agents' portfolio with non-proprietary products. Latest additions are Fortis Health's Short Term Medical and Student Select products. 

HEALTHY? - Most health insurers are reporting higher second-quarter earnings, but medical costs may be rising faster than premiums. However, some health care providers are already having problems...notably Aetna (the nation's largest HMO with 19 million customers) and PacifiCare.  Bottomline: Expect premiums to reflect the rising cost trend. 

P & C CONSOLIDATION - A.M. Best reports that property/casualty net premiums showed strong growth for the first quarter, fueled by price increases in reinsurance and commercial-lines markets.  Further, "market casualties have been the catalyst for a flight to quality in the primary market, which will accelerate consolidation and widen the gap between strong and marginal players."  The full report is available at http://www.bestweek.com.  Non-subscribers must pay.
 

HURRICANE EXPOSURE - How quickly we forget.  According to Weiss Ratings, 65% of residents in hurricane-prone states are covered by just eight P & C insurers...State Farm, Allstate, Zurich, Nationwide, Citigroup, USAA, Safeco, and Liberty Mutual. "To understand why this is cause for concern, just remember what happened in the wake of Hurricane Andrew in South Florida," explained Martin D. Weiss, Ph.D., chairman of Weiss Ratings. "Insurers claimed it was unreasonable for them to be expected to cover risks of such magnitude and ceased writing new business, they asked regulators for help in paying claims, and they jacked up rates. Now, nine years later, those same players have achieved an even more dominant position in the market." 

ALSO FROM WEISS - The growing concentration of the homeowners insurance market is a national phenomenon that has been progressing for many years. At yearend 2000, the same eight insurers above controlled a record 58% of the market, compared to only 26% in 1965, while State Farm and Allstate have increased their market penetration even more dramatically -- up from just 6% of the national market in 1965 to 33.3% in 2000. 

TRANSPLANT INSURANCE - With organ and bone marrow transplants costing upwards of $1 million each and with potentially dozens of corporate employees on the waiting list, Zurich and Special Risk International have developed a unique insurance program that covers the cost of transplant procedures. Apparently it will be a supplemental plan designed to take over where "traditional medical plans fall short in providing a win-win solution for employers and employees in the area of critical care." 

DELAY IN PAYDAY - A jury awarded 2,402 Farmers Insurance adjusters a total of $90,009,208 as overtime pay in a class action lawsuit. The adjusters were successful after five years of litigation in recovering an overtime fund to be divided among them. Farmers will also have to pay about $30,000,000 in interest and the plaintiffs' attorneys' fees and costs.  The press release came from the plaintiffs' law firm but the total "fees and cost" were not provided. 

MORTGAGE INSURANCE DYING - Both the number 1 (Citigroup) and number 2 (Household International) consumer finance firms will stop selling single-premium credit insurance on mortgage loans. Household was the last major lender to do so. Most of the companies will continue to offer a fixed monthly premium product. 

GLOBAL WARMING AND HURRICANES - A comprehensive study by Tillinghast-TowerPerrins, which analyzed insured hurricane damages from all hurricanes that affected the continental U.S. in the 20th century, refutes some analysts' claims that global warming has caused increases in catastrophic hurricane damages. (Global warming is, however, responsible for the "crop circles" in England.) FYI, Hurricane Andrew was not the most expensive in insured damages. A September 1926 Miami hurricane led the way with $50 billion. Andrew actually ran a distant second with $25 billion. 

BUSH PUSHES Rx DISCOUNTS -President Bush proposed a Medicare prescription drug benefit this past week. Participants would pay $25 to join and receive 15% to 25% off their prescriptions. Bush described it as "a first step," not a substitute for a drug benefit. 

FINES - The Federal Reserve and the New York State Banking Department combined to slap a $10 million fine on Charles Schwab Corp.'s U.S. Trust unit. This was one of the largest such fines ever levied on a U.S. bank for a series of violations at the bank. The NASD hit E-Trade, the No. 2 online brokerage, for $90,000 for deceptive advertising.

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TAX FREEDOM DAY - This is scary. July 6th was "Tax Freedom Day"...the day when the average American has made enough money to pay his taxes and begin working for himself. We remember when the event occurred in May! 

STRUCTURED SETTLEMENTS GROW - The National Structured Settlements Trade Association (http://www.NSSTA.com) projects that structured settlement sales will increase more than 20% in 2001 compared to 2000. And 2000 was the best year ever for the industry, with total premiums running about 25% above 1999.  Structured settlements provide long-term financial security to injury victims and their families through a stream of payments tailored to their needs. 

MDRT SURVEY FINDS WOMEN UNPREPARED - Most women are concerned about their financial future, but lag behind their male counterparts when it comes to preparing for retirement. 56% of the respondents said they plan to rely on their husband, inheritance or a stock market windfall to support them during retirement. Some key findings: Most do not realize that due to longevity they need to save more money than men for retirement; nearly one quarter of women think $100,000 or less will be enough to support them; women have mostly conservative investments, twice as many men hold mostly aggressive investments.  The survey was conducted for MDRT by ORC International and details are at http://www.soundfinancialplan.com. 

THE GREATEST GENERATION'S LAST CHALLENGE - Many seniors don't understand that Medicare or their Medicare Supplement Insurance won't help them pay for their long-term care needs. According to a CareQuest study, nearly two-thirds of people who are 65 and older either do not know, or have incorrect information about Medicare coverage for long-term care. "This is a multigenerational crisis, it affects the elderly, their children, grandchildren – and their collective estates." For a copy of the study, call 800-327-7138 or email: info@Bridge-Link.com.  

BABY BOOMERS CHALLENGED, TOO – The GE Center for Financial Learning has found that only 7% of Baby Boomers have an adequate LTC plan in place. Check out http://www.financiallearning.com for more on this, as well as other information on personal financial and life-event planning. 

LTC AND UNIVERSAL LIFE - We have long been proponents of asset-based LTC that several companies are now offering. Apparently interest among companies continues to grow. Transamerica is adding LTC riders to worksite UL products, enabling chronically ill insureds to receive an early payout of their life insurance death benefit to pay for care-related expenses. 

MARKET TREND - We have found you can predict trends by monitoring the number of articles, news releases and ads on a given subject, topic or product. If this is true, LTC is going to be a huge marketing opportunity for advisors. 

ESTATE TAX NUTSHELL - Here is a quick estate tax summary of the new and weird Economic Growth and Tax Relief Reconciliation Act of 2001.  The top tax rates drop from 55% to 45% between now and 2007 and are repealed during 2010. The estate tax rate is then reinstated in 2011, at the present rate of 55%. At the same time, estate tax credit exemptions gradually increase from today's exemption of $675,000 to $3.5 million in 2009, only to drop that exemption back to $1 million in 2011. 

FIGHTING ESTATE TAX UNCERTAINTY - Transamerica Occidental Life is adding an option to its survivorship life insurance policies which will allow policyowners to fully surrender their inforce contracts during the calendar year 2010 with no surrender penalties if the repeal of federal estate taxes extends beyond Dec. 31, 2010. Seems like a reasonable "wait and see with little risk" approach that provides some flexibility in making long-term planning decisions.  Few, if any, policy purchasers plan on dying within the next nine years anyway. 

INTERNET AND EXTRANETS - In case you are interested, Gomez.com listed their top insurer web sites, with Progressive, Allstate and GE taking top honors. Others can be found at: 
http://www.gomez.com/scorecards/index.asp?topcat_id=90. Great article on the value of extranets from KnowledgeDigest located at: http://www.bfmag.com/channels/index.cfm?ID=6 (Search for "Extranet"). There are now 28 companies that have made LUTC's VSA (http://www.lutc.com) a part of their Internet/extranet strategy. Company marketing folks can see why by e-mailing boquin@ix.netcom.com for a complimentary account.