MORE DOUBLE DIGIT HEALTH INCREASES? – Hewitt Associates is predicting that 2001 will mark the third consecutive year that U.S. employers will be hit with major health care cost increases. They predict increases of 10 to 13% with a projected annual cost of $4,707 per employee. Major drivers: prescription drug costs and the pressure to produce improved bottom line results.  Don't be surprised if these increases accelerate the way in which health care is financed in the United States...employers increasingly want out of the middle.

"CESSPOOL OF CRIME AND FRAUD" – That's the term used by a spokesman for the Coalition Against Insurance Fraud to describe the viatical industry.  While it started out as a sound, beneficial helping hand to those dying from the AIDS epidemic in the 1980s, the largely unregulated viatical business has become a breeding ground for fraud and embezzlement on a large scale.  Regulatory intervention is overdue and will undoubtedly be welcomed by the honest players in the viatical industry.

FIRST DIVIDEND – MetLife recently declared its first stock dividend...$0.20 per common share, payable on December 15, 2000 to shareholders of record as of November 7, 2000.  The value of MetLife stock has grown steadily from its $14.50 IPO price in April to around $25 per share today.  In other MetLife news, the company is receiving $858 million for its 48% interest in Nvest, a Boston-based investment management firm being acquired by CDC Asset Management, the investment management arm of France's Caisse des Depots Group.

FOREIGN INVASION CONTINUES –German giant Allianz is purchasing U.S. asset manager Nicholas-Applegate for about a billion dollars and will add it to its other U.S. money managers  (PIMCO, Oppenheimer and Cadence Capital).  With this latest acquisition, Allianz will have nearly $665 billion under management worldwide, making it one of the ten biggest global asset managers.  There is some speculation that the continued convergence of banks, money managers and insurance companies will tilt the scale toward federal regulation of the insurance industry in order to make it more consistent with banking and securities regulation.

NYSE LISTING – Reuters reports that Allianz AG, the German insurance giant, may be close to receiving SEC approval for a listing on the New York Stock Exchange.  With a NYSE listing, Europe's largest insurer could then use its U.S. shares in lieu of cash in continuing to strengthen its U.S. insurance and mutual funds businesses through acquisitions.
 

RECRUITING FRENZY –According to Investment News, Prudential's plans to eliminate some 400 field manager positions in a reorganization within the next four to six weeks has led to a "recruiting frenzy" among Pru's major competitors, including MetLife and John Hancock.

DI REPORT FROM LIMRA – According to a LIMRA study, companies active in individual disability income see growth in the guaranteed renewable market, but decline in the noncancelable market.  The study also found that, in spite of individual DI's shaky track record, most companies are optimistic about DI sales over the next few years. Call LIMRA at 860-285-7742 for details.

HISTORICAL LANDMARK – New York Life's home office building at 51 Madison Avenue in New York City has been designated as an historical landmark.  Often called the "Cathedral of Insurance," the building was erected in 1928 on the site of the original Madison Square Garden and is a prominent part of the NYC skyline.

HMO FINANCIAL STABILITY – According to a study of 572 HMOs by Weiss Ratings, 11 of them have failed to meet the guidelines recently adopted by the NAIC for the minimum capital level needed to maintain financial stability.  Another 78 HMOs were deemed "very weak" financially by Weiss, with an additional 162 HMOs considered "weak."

STATE AUDIT – According to the first audit conducted since he was forced from office, former California Insurance Commissioner Chuck Quackenbush "abused his discretion and may have broken the law in settlements with insurers," by agreeing illegally to keep settlement terms confidential.

FBI SET UP – After being found guilty on seven counts of lying to federal investigators, the Louisiana Insurance Commissioner, Jim Brown, claims he was set up by the FBI.   Former Louisiana Gov. Edwin Edwards and attorney Ronald Weems were acquitted on conspiring to arrange a cheap bankruptcy settlement for the failed Cascade Insurance. Brown said, "I want to get this verdict overturned and come back and prove this remains the top insurance department in America."

PRODUCT-DRIVEN INDUSTRY – Despite much talk to the contrary, the insurance industry still seems to rely heavily on developing new products to keep the troops motivated. There is a steady stream of "new and better" products being highlighted every week in the industry magazines. New York Life and Manulife sent press releases this week about new and improved survivorship life policies. They must be counting on an Al Gore victory, because if George W. has his way with estate taxes, the sale of survivorship policies will likely be greatly reduced.