|
 October 1, 2005
Edition |
|
|
|
|
KATRINA
EXODUS – USA
Today
reports 1.3 million people have left the Gulf Coast and are now located
in all 50 states. FEMA applications were filed from 18,700 ZIP codes in
all 50 states...nearly half of the nation's residential postal zones.
While many remained within 250 miles of home, "the dispersion shows
this is one well-networked country." Some of the flight could be
permanent, as it was in the Great Flood of 1927, and thereby change the
complexion of the entire region. Click here
for a map of where evacuees are now living.
RITA
NOT KATRINA
– Early estimates indicate that damage by Rita will be only a
fraction as costly Katrina. Estimates of Katrina's insured losses range
from $35 to $60 billion...easily making it the most costly natural
disaster in US history.
TIGHTER
PENSION RULES
– Aimed at preventing more of the big pension collapses,
Senate
committee leaders reached agreement on a bill to tighten the rules for
corporate pension plans. However, a provision would allow some airlines
to go for as long as 20 years without contributing to their pension
plans is causing some House committee members to raise questions.
BIGGEST
BUSINESS
COST CONCERN? - According to a survey by Buck Consultants,
"health care costs now rival labor costs as employers' top business
cost concern." More information on survey results is
available here.
THE
GOOD: DURABLE
GOODS RISE - New orders for big-ticket manufactured
products
rose in August at the fastest pace in three months, providing a
reassuring sign that American factories are not headed for another
slump.
THE
BAD: CREDIT CARD
DELINQUENCIES UP – Credit card loan
delinquencies reached
a record high of 4.81% of accounts in the second quarter of this year.
"The last two quarters have not been pretty," said James Chessen,
American Bankers Association's chief economist. "Gas prices are taking
huge chunks out of wallets, leaving some individuals with little left
to meet their financial obligations."
THE UGLY: AIG SUES FOR
CONTROL –
Escalating the battle with former CEO Maurice "Hank" Greenberg, AIG has
sued for control of $18 billion of AIG shares held by a company
Greenberg controls. AIG wants the $18 billion of shares
(about a
12%
stake in AIG) held by Bermuda-based Starr International Co. to be used
"for the sole purpose for which they were intended: to provide deferred
and retirement compensation with the aim of attracting and retaining
valued AIG employees and to benefit the long-term growth of AIG."
WELLPOINT
BUYS
WELLCHOICE – Wellpoint, the parent company of
many state
Blue Cross and Blue Shield Plans, as well as UniCare, is acquiring
WellChoice, the parent of the New York Blues for $6.5 billion.
|
|
The
Ultimate Collection for Entrepreneurs and Sales Professionals
Ten
of the world's premier authorities on Leadership, Sales, Management,
Entrepreneurship are available in this special package.
10
DVDs/10CDs - *Free
Shipping - Limited Time Offer
(Buy
Individually or as a
Complete Set)
|
Stephen
Covey
Brian
Tracy
Jeffrey Gitomer
Dr. Lois Frankel
Les Brown
|
Terri
Sjodin
Harvey Mackay
Connie Podesta
Jim Rohn
Tom Hopkins
|
10 DVDs/10CDs in
the Complete Collection -
Buy as a complete
set or individually
|
|
|
CASE
AGAINST JOB-BASED HEALTH INSURANCE
– This may not be popular in our industry, but many experts
are
calling for an end to employer-based health insurance. They point out
that companies don't buy your groceries, make your house payment or pay
your utility bills, so why should they provide health insurance?
Further, the soaring cost of job-based health insurance puts American
companies at a disadvantage in global competition. When U.S. companies
move jobs overseas, they don't get just cheaper labor...they escape the
steep and rising cost of employee health care.
BUT THE
PROBLEM IS...
– A large number of people prefer health plans chosen by
their
employers, according to a Commonwealth Fund survey. It's not
really surprising that a lot of workers would prefer having someone
else with more expertise do their health care "homework" for them and
select the "best" plans. The problem is that this attitude
flies
in the face of any trend toward employers getting out of providing
job-based health insurance.
MORE ON
HEALTHCARE
- Here's another interesting survey on employers' attitudes and
predictions concerning the healthcare system from United Benefits
Advisors (http://www.benefits.com).
More information is available in a press
release, but interesting findings include an overwhelming
majority
of employers believing that the federal government has a definite role
to play regarding health care, plus a belief that within the next five
years, all healthcare providers will be required to publicly disclose
all cost and quality information and employer will increasingly adopt a
"total compensation" approach through which employees receive a single
compensation amount which they then allocate between take-home pay and
benefits.
NEW
BANKRUPTCY LAW – The new
bankruptcy rule becomes law on October 17. Hopefully, you don't have
many clients who need to be concerned about this but, unfortunately,
some of Katrina's victims might want to take advantage of the older,
less restrictive rules.
SUITABILITY
SUIT: ANNUITIES IN IRAs
- Pacific Life faces a class-action suit from about 120,000 annuity
contract holders contending that the company improperly sold variable
annuities for use within individual retirement accounts.
WADDELL
& REED TO PAY $11 MILLION
- The Pennsylvania Insurance Department has reached a settlement that
requires the brokerage firm Waddell & Reed to pay $11 million
in
restitution to consumers nationwide whose variable annuities were
switched from one product to another. The recommendations to change
annuities were made without regard to the customers' best interests and
ultimately cost consumers money in surrender fees.
|
 |
|
|
|
 |
KETRA
- The Katrina Emergency Tax
Relief Act of 2005 (KETRA) was passed unanimously by Congress on
September 21, 2005 and signed into law by President Bush on September
23, 2005. This tax package is designed primarily to extend
temporary tax relief to individuals and businesses in Louisiana,
Mississippi and Alabama suffering from the devastation of Hurricane
Katrina. KETRA also extends help to the thousands of relief
workers, as well as to those who are contributing to relief efforts
through donations and in other ways. For a complete summary,
click here.
LTC
RISES MORE THAN
5% - The average daily cost of a private room in a nursing
home
in the United States is $203 per day, or $74,095 annually, up 5.7% when
compared with last year's $192, according to the 2005
MetLife Market Survey of Nursing Home & Home Care Costs.
The
highest rates once again were in Alaska, $531 per day, and the lowest
were in the Shreveport area of Louisiana, $115. The study also found
that the cost of a home health care aide averaged $19 per hour
nationally, up by $1, or 5.5%. The average stay in a nursing home is
2.4 years, for a total average cost of $177,828. There are about 1.3
million people in 17,000 nursing homes in the U.S.
AFFLUENT
WOMEN
- Affluent women are looking for holistic services from their financial
services providers and the industry is letting them down. So says a
report from the Spectrem Group. In a series of focus groups, this group
said they want integrated solutions to their financial services
needs...investment management, financial planning, and retirement and
tax planning. However, they do not believe such holistic services are
currently available.
NASD
AND INDEXED
ANNUITIES – The
National Underwriter reports that the two top NASD
officials
have expressed their concern that "sellers of variable annuities, fixed
annuities and equity-indexed annuities may face less stringent
regulation than sellers of comparable mutual funds face" and focused at
a recent conference on EIA sales practices. According to the NASD
Vice-Chairperson, "Despite what you may read in the press, our goal is
not to extend our jurisdiction to insurance companies. Rather, we
simply believe that our members need to be aware of the regulatory and
supervisory risks that can arise when their registered representatives
sell these products, particularly when they are marketed as securities
products and offer substantially greater sales compensation than
traditional registered securities."
BENEFITS
DISCRIMINATION OKAYED – Ruling against AARP, a
federal
court in Philadelphia has ruled in favor of employers that provide
richer health benefits to retirees under age 65 than to those who have
reached Medicare age. AARP's position is that the federal Age
Discrimination in Employment Act requires employers to provide the same
level of health benefits to all retired employees. Don't look
for
any changes soon...the ruling is expected to go to the 3rd Circuit
Court of Appeals.
PROPOSED
DEFERRED
COMP REGS – The IRS is asking for public comment
on
proposed regulations for nonqualified deferred compensation
plans. The new rules could also have an impact on the
treatment
of older split-dollar plans. For more information, go to the
Treasury Department press release by clicking here.
The press release contains a link to a copy of the proposed regulations.
CLEVER
AND POWERFUL
PRU ADS – Prudential's two new ads show the need
for life
insurance in a powerful way. Here is a preview from National
Underwriter. "In both commercials, a boy is watching television with
his father, sees an ad from Prudential and asks his father whether the
family has life insurance, according to Prudential, Newark, N.J. In the
first commercial, the father answers with a reassuring "yes." In the
second commercial, the father hesitates, then says "no."
EVERYONE
LIKES DUCK! -
That famed spokesfowl, the Aflac Duck, has been honored as one of
America's favorite advertising icons with an engraved plaque on the
"Madison Avenue Advertising Walk of Fame."
And
here's the Duck in all his
glory! ==>
|
 |
ON THE
SHELF
- Hurricane Katrina has forced Congress to shelf a variety of issues of
interest to the financial services industry, including Social Security
reform and plans to extend the dividend and capital gains tax
cuts. Social Security reform was in trouble prior to Katrina
and
the 15% tax rate on dividends and capital gains doesn't expire until
2008, so neither delay may be of much consequence.
SYMETRA
OFFERS
WORKSITE UL – Symetra, formerly Safeco, is
offering a
turnkey voluntary worksite UL program that requires no employer
contributions and offers "living benefits" for terminal illness and
nursing home care.
POOR
PLANNING
– Americans do a poor job of planning for health care
expenses...that's the conclusion of a survey conducted by Humana and
Consumer Action. The groups have put their money where their
mouths are by developing a web site - Family Health Budget (http://www.familyhealthbudget.com)
- designed to help Americans do a better job of budgeting for health
care expenses.
GOOD
IDEA
– "Anyone relying on term life insurance provided through
their
employer should realize that the coverage will terminate if they lose
their job. They may be able to convert some portion of the group term
coverage to individual coverage. If that converted amount is not
enough, they should consider purchasing some individual life insurance
to supplement the group term insurance so that a job loss does not
leave them with an inadequate amount of coverage."
SOME
RETIREMENT
KILLERS - 1.
Cracking
your nest egg before retirement. 2.
Spending your retirement money way too early. 3. Having no clue
about how much to
save. 4.
Spending your
retirement savings too fast. 5.
Not giving a hoot about asset allocation. 6. Letting Uncle Sam
eat your
retirement (take advantage of tax planning) 7. Depositing your
retirement in
your fatty deposits. (Eat out less. Save money. Lose weight) 8. Paying too much
for help. 9.
Retiring permanently when you
really just needed a break.
SEARS
RETIREES PAY
ALL - Thousands of Sears retirees under 65 must begin
paying the
full cost of their health care coverage. Many of the effected retirees
were relieved that the company didn't drop their plan completely. This
could very well be a trend.
DON'T
LET WHAT YOU
OWN OWN YOU – This is some sage advice, not from
a
financial advisor but from a psychologist, Marlo Archer. "If you merely
have what you need, that is the most comfortable. When you own more
than what you need, more than what you can manage, that's when you feel
really oppressed. We get tricked into thinking that if we just had more
we'd be all right, but it's actually the other way around. We do much
better with less."
HSA
COMPATIBLE HMOs
– This could be a good choice for some people. Care Choices
has
introduced high-deductible health maintenance organization plans
designed for use with health savings accounts.
SILVER
LINING?
- Some analysts are predicting that silver may be primed for a big
rally. The precious metal, which currently trades for about
$7 an
ounce, is used in the electronic, jewelry and photographic sectors and
is in short supply, with demand exceeding production.
HOSPITAL
BILLING
ERRORS – Here are the 8 most common hospital
billing
errors to watch for: 1.
Duplicate billing 2.
Number of days in hospital 3.
Incorrect room charges 4.
Operating-room time 5.
Up coding (Giving generics and charging for more costly
medications) 6.
Keystroke errors 7.
Canceled work 8.
Services never rendered
HEDGING
YOUR HOME
– With equity in one's home becoming such a large part of
many
people's portfolios, Merrill Lynch and other investment banks have
started offering investment products that will rise in value if a
basket of housing-related stocks declines. Already, nearly $400 million
of these investments have been sold. Take care. Derivative products
like these can be complicated and risky, and none of them offers a
perfect hedge against the risk that the value of any individual home
will fall. But they do provide a new strategy for people worried about
an eventual slump in housing.
|
|
