Insurance

As the 2009 hurricane season arrives, many homeowners are finding insurance either more expensive or harder to get.

Homeowners from New York to Florida and in the Gulf Coast region are again seeing premiums rise and coverage change. And more are losing their coverage. Hurricane season starts Monday.

Insurers “just don’t like being in the business … too much risk,” said Scott Hall of Market Street Advisers, a financial advisory firm in Wilmington, N.C.

Homeowners insurance premiums are up about 3 percent nationwide, according to the Insurance Information Institute.

Last year’s losses and the financial market turmoil have helped push up rates.

New York Insurance Superintendent Eric Dinallo is stepping down, leaving the most important U.S. regulatory post in the industry vacant.

Dinallo will become a visiting professor at New York University’s Stern School of Business, Governor David Paterson’s office said in a statement yesterday. Insurance is regulated in the U.S. by states, giving the New York watchdog an outsized role with oversight in the country’s financial center.

Dinallo, 45, spoke out about the need for cooperation between state and federal regulators in the aftermath of the U.S. bailout of American International Group Inc. He testified in Congress about efforts to protect policyholders of AIG, once the world’s biggest carrier. When bond insurers faltered, he engineered the entrance of Warren Buffett’s Berkshire Hathaway Inc. to bolster the market.

“Without a doubt he tried to set the agenda,” said Robert Haines, an analyst at CreditSights Inc. “He was putting ideas out there and was trying to address the problems much more so than a lot of the regulators out there that seemed to be trying to cover their” reputations.

Dinallo was appointed to the insurance post by then- Governor Eliot Spitzer in 2007. Dinallo assisted on probes of financial firms when he worked for Spitzer at the state attorney general’s office. The New York Times said May 27 Dinallo may be a candidate in the race to become attorney general. His resignation from the insurance post is effective July 3.

Worker’s Compensation

Marissa Shorenstein, a spokeswoman for the governor, had no comment on who would succeed Dinallo. Andy Mais, a spokesman for the New York insurance department, said Dinallo was unavailable for comment, and referred questions to Paterson’s office.

Paterson, in his statement, said Dinallo helped reform workers’ compensation and collaborated with state officials and federal regulators in the rescue of New York-based AIG. The governor and Dinallo had a “wonderful working relationship,” Shorenstein said.

“We are living through one of the most challenging times in our country’s financial history,” Dinallo said in a statement distributed by Business Wire. “Joining NYU gives me a great opportunity to continue to participate in critical financial issues from a new perspective.”

Dinallo helped bolster the business of insuring municipal bonds after companies including MBIA Inc. and Ambac Financial Group Inc. were overwhelmed by losses on securities backed by home loans. Dinallo in 2007 approved Berkshire’s entry into the business, then brokered deals to allow money-losing guarantors to make partial payments on insurance contracts with banks.

Bond Insurance

He also helped MBIA split its municipal bond insurance business from the mortgage-related debt guarantees that led to the loss of its top credit ratings.

“He used his office as a bully pulpit,” Sean Dilweg, Wisconsin insurance commissioner and a friend of Dinallo, said in an interview. “He really laid the groundwork for all the discussions we have now” about preventing the collapse of financial firms.

Bank of America Corp., JPMorgan Chase & Co., UBS AG and 15 more of the world’s largest financial companies this month challenged Dinallo’s approval of MBIA’s split, suing to reverse the biggest bond insurer’s separation as they claimed it illegally cut their odds of getting paid on policies.

Dilweg, who oversees Ambac’s main unit, said in a March interview that “we’ve always had concerns with splitting the book because you get into drawing lines and giving preferences,” referring to that New York-based insurer’s guarantees.

Looking to New York

Howard Mills, who was New York insurance superintendent in 2005 and 2006, said watchdogs elsewhere look to New York for guidance and the job is “seen justifiably as the most significant regulatory post for insurance.” Mills is now chief adviser for the insurance group at Deloitte & Touche LLP.

A graduate of New York University, Dinallo previously worked for Willis Group Holdings Ltd., the world’s third-largest insurance broker.

Dinallo was called to testify in Congress and the state legislature about the risk of credit-default swaps, the derivatives that brought AIG within hours of bankruptcy.

The contracts, which allow investors to speculate on the creditworthiness of borrowers, were “more dangerous” than gambling, Dinallo said in December at a New York Assembly hearing in Manhattan. Unlike casinos, swaps sellers aren’t required to keep funds to pay losing wagers, he said.

Broader Oversight

Dinallo said in September that a portion of the market should be regulated like insurance to ensure companies have enough funds to meet commitments. He shelved the proposal because of progress by federal regulators on broader oversight of the market.

Illinois Insurance Director Michael McRaith and Dinallo were heading a committee of the National Association of Insurance Commissioners looking into whether regulators were too dependent on ratings from firms including Standard & Poor’s and Moody’s Investors Service. Dinallo said in a Wall Street Journal op-ed in March that the current rating system is “fundamentally flawed” and leads to inflated credit grades.

“I’ve enjoyed working with Eric for the last couple of years,” McRaith said in an interview. “I’ve not always agreed with everything Eric’s said. But, he’s always engaged, and he moved the discussion forward.”

A.M. Best Co. has affirmed the financial strength rating (FSR) of 'A+' (Superior) and issuer credit ratings (ICR) of "aa-" of Ohio-based American Modern Insurance Group and its P/C members. Best has also upgraded the FSR to 'A+' (Superior) from 'A-' (Excellent) and ICR to "aa-" from "a-" of American Modern's formerly separately rated subsidiary, First Marine Insurance Company of Osage Beach, Missouri. The outlook for all ratings is stable.

Best noted that the American Modern companies are owned by Munich American Holding Corporation, the U.S. based subsidiary of Germany's Munich Reinsurance Company.

"The ratings of American Modern reflect its historical favorable capitalization, consistent investment income and generally profitable underwriting performance in recent years," said Best. "The group functions as a niche provider of insurance products for the residential property, recreational vehicles and financial services markets through its multi-faceted distribution channels. The ratings also acknowledge the financial flexibility afforded American Modern as part of the Munich American Holding Corporation organization.

Partially offsetting these positive rating factors are American Modern's above average expense levels in relation to the property lines industry composite and elevated premium leverage. In addition, as over half of American Modern's business is residential property, its performance is susceptible to frequent and severe weather events as demonstrated in 2008."

However, Best added, "American Modern continues to maintain reinsurance programs, modify underwriting criteria and selectively spread its geographical risks in catastrophe-prone areas to mitigate potential effects of future catastrophic events."

First Marine is a provider of various watercraft coverages and was purchased by American Modern Home Insurance Company of Cincinnati in 2008. "The ratings of First Marine reflect its participation as a new member of American Modern's inter-company pooling agreement."

Best also said it has affirmed the FSR of 'A-' (Excellent) and ICR of "a-" of American Modern Life Insurance Company and the FSR of 'B++' (Good) and ICR "bbb" of Southern Pioneer Life Insurance Company of Trumann, Ariz. The outlook for these ratings is also stable.

Best explained that the ratings on the life companies reflect their "strong risk-adjusted capitalization and the support of their holding company, American Modern.
Partially offsetting these factors are the companies' modest earnings performance, their relatively small contributions to the parent organization and a susceptibility to further erosion of direct premiums written due to the economic environment and decline in lending."

CHARLOTTE, N.C.--(BUSINESS WIRE)--Today, Nationwide Insurance teamed up with NASCAR star Kyle Petty, David Ragan and Erik Darnell, drivers of the NASCAR Nationwide Series No. 6 Roush Fenway Ford, to raise awareness about DWD – Driving While Distracted.

“Young drivers today are faced with more distractions than ever before, and diverting their attention away from the road with cell phone calls and text messages creates a very dangerous situation,” said Kyle Petty. “It is important for our children to learn about the risks associated with distracted driving. If we can raise awareness on this particular subject I believe we can save lives.”

Nationwide Insurance brought NASCAR to New Technology High School at Garinger to launch the second year of its education campaign to spread the message of dangers of driving while distracted. Students saw firsthand the impact text messaging has on their driving abilities while racing in a NASCAR simulator.

"I am so glad Nationwide Insurance is raising awareness about Driving While Distracted,” said David Ragan, driver of the No. 6 Discount Tire Ford Fusion. “I am extremely focused while on the road and very conscious of what is going on around me. Our young motorists can learn a valuable lesson in safety through this special program. If we all do our part in abiding by the laws of the road, it will make our daily commute more enjoyable and much safer.”

The National Highway Traffic Safety Administration says distracted drivers account for nearly four out of five crashes in the U.S. The problem is especially bad for young drivers. In a 2008 survey, Nationwide found that nearly 40 percent of the teenagers and young adults surveyed admitted they send and receive text messages while driving - the same percentage of those questioned who said they have been hit or almost hit by another car whose driver was talking on a cell phone.

“It doesn’t matter if I’m on the track going 180 mph or just driving to the shop, I’m always aware of my surroundings. Staying alert and avoiding distractions while behind the wheel not only keeps me out of trouble, but also those around me. Nationwide Insurance has done an outstanding job with the Driving While Distracted program and I am proud to be a part of it,” said Rookie of the Year Contender Erik Darnell, driver of the No. 6 Northern Tool + Equipment Ford Fusion.

Nationwide and the National Safety Council developed www.NationwideSmartRide.com, a Website to provide parents and teens free tools and resources to help develop safe drivers and reinforce smart behavior. It is available free to anyone regardless of whether they are a Nationwide customer.

“Clearly, distracted driving has taken over our roadways and Nationwide wants to educate all drivers that they need to focus on the road, not on their technology, when behind the wheel,” said Bill Windsor, Associate Vice President of Safety for Nationwide Insurance.

New Technology High School at Garinger was selected for this event because of their Racing to Inspire, Stimulate & Educate (RISE) program. RISE, a gang prevention program for high school youth, focuses on career options in motorsports and other science, technology, engineering and math related careers. RISE has 20 Garinger High School students in hands-on learning opportunities so that they may discover paths that lead to potential work within North Carolina’s motorsports industry.

The NASCAR Nationwide Series will be at Lowe’s Motor Speedway on Saturday, May 23, 2009 for the Carquest Auto Parts 300. Coverage beings at 7 p.m. on ESPN2.

Nationwide, based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by A.M. Best. The company provides a full range of personalized insurance and financial services, including auto insurance, motorcycle, boat, homeowners, life insurance, farm, commercial insurance, administrative services, annuities, mortgages, mutual funds, pensions, long-term savings plans and health and productivity services. For more information, visit www.nationwide.com.

The NASCAR Nationwide Series logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc., and Nationwide Mutual Insurance Company. NASCAR ® and the NASCAR logo are registered trademarks of the National Association for Stock Auto Racing, Inc. Nationwide SmartRide is a service mark of Nationwide Mutual Insurance Company. Nationwide, On Your Side and the Nationwide Frame mark are federally registered service marks of Nationwide Mutual Insurance Company.

As it girds for hurricane season, Texas has plenty to worry about. The Texas Windstorm Insurance Association (TWIA) - which provides coverage for high risk coastal properties - has ended up at the brink of insolvency paying Hurricane Ike claims.

Insurers operating near the coasts have begun to cut back on coverage and make noises about leaving the state. If that wasn't enough, some members of Congress now want to change tax law in a way that will drive already expensive coastal Texas insurance premiums even higher. The tax law change involves something called "offshore affiliated reinsurance" - a rather esoteric product that matters a lot here in Texas.

Explaining why requires some background. To begin with, all sizeable primary insurers - companies like State Farm, Allstate, and Farmers' - that deal with consumers, buy insurance of their own - reinsurance - to help cover particularly large losses and diversify their own portfolios. (TWIA itself purchased about $1.5 billion in reinsurance prior to Hurricane Ike.) Particularly in high-hurricane-risk areas like Galveston, many companies find it advantageous to buy some or all of their reinsurance from a parent or sister company that they know won't abandon them following a major storm.

Most reinsurance companies have headquarters outside of the U.S. and TWIA, like most other U.S. insurance companies, buys most of its reinsurance from these "offshore companies." The existence of offshore companies benefits everyone: through international markets Texas's hurricane risk gets pooled with Indonesia's risk of cyclones. Since the events never occur at the same time - the storm seasons happen at different points in year - the reinsurance costs less. Offshore reinsurance competition drives down prices and, in some cases, "affiliated" reinsurance from a sister company proves the best deal of all.

Right now, international and U.S. reinsurance transactions get taxed at just about the same overall rates. Sometimes U.S. companies get a better deal and sometimes companies from elsewhere do a little better.

But this could change: A proposal winding its way through Congress - sponsored by Richard Neal (D-Ma.) - would impose an enormous tax on these international affiliated reinsurance transactions that would place non-U.S. companies at a huge disadvantage.

This would force many offshore companies to write less coverage or even withdraw from the Texas market al together. Although U.S.-based reinsurers would take advantage of this by selling more reinsurance to other U.S. primary insurers (including their own affiliates) they still have limited capacity.

As a result, primary insurers that couldn't buy enough reinsurance would have to raise rates and reduce coverage in order to build the financial cushion they typically would get from affiliated offshore reinsurance.

And consumers would pay the tab. The economic research and consulting firm the Brattle Group has estimated that, under Neal's proposal, total reinsurance capacity would fall 20 percent and insurers would have to raise premiums by an estimated $10 to $12 billion to give them the cushion they would otherwise have if they could buy enough reinsurance.

Texans who live near the coast would pay a lot of this - at least $350 million. Since Texas' Gulf Coast counties rank among the state's poorest, furthermore, already disadvantaged Texans would see premiums soar. And, because international insurers would probably stop doing business in the U.S. rather than pay the tax, the federal government wouldn't get much revenue. Even worse, some European officials have threatened a trade war over the issue.

Raising taxes on offshore affiliated reinsurance is bad idea. If Rep. Neal's bill moves forward, Texans will see their homeowners' insurance bills soar. Members of the Texas Congressional delegation should tell their colleague from Massachusetts to stop tinkering with the federal tax code. Ike hurt Texas badly enough. Congress needs to avoid tax law changes that could make things even worse.

Eli Lehrer is a senior fellow at the Competitive Enterprise Institute, where he directs the Center for Risk, Regulation, and Markets.

This article originally appeared in the Austin American Statesman and is reprinted with permission from the author.

BY JOHN IZZO AND KEVIN GRENIER

FOR THE FREE LANCE-STAR

It's easy to overlook insurance in today's difficult economic times. Even though insurance is seen as a commodity, it is imperative that you get the best coverage.

You need to know how insurance works. Policyholders pay a premium to insure against shouldering the entire cost of an accident. The major forms of personal insurance are automobile, homeowners and umbrella.

AUTOMOBILE INSURANCE

Everyone is familiar with auto insurance since it's mandatory in almost every state. Highlighted below are seven tips that will help you save on auto insurance:

Be a safe driver. That's the best way to reduce your auto insurance premiums.

Shop around. Today you can compare coverage options online for several companies simultaneously.

Ask about discounts. Some insurance companies offer discounts to members of organizations and associations. Additional discounts may apply for insuring multiple cars on the same policy, having air bags, completing a defensive driving course or being a good student.

Increase deductibles. Increasing your collision and comprehensive deductibles --the amount you pay out of pocket in the event of an accident--will reduce your premium.

Drop comprehensive and collision coverage on an older car.

Reduce annual mileage.

Check your insurance before buying a new car. Some cars cost more to insure than others.

Insurance actuaries use accident statistics to project losses and determine the risk a company can take. Rates are based on driving experience, number of accidents and driving offenses, age, type of vehicle, area in which you drive and more.

Insurance coverage protects you if you injure someone or their property, get hit by another car, have an accident with an uninsured driver, or suffer vehicle damage as a result of theft, flood, fire or other natural perils. A deductible (out-of-pocket payment) usually applies.

HOMEOWNERS INSURANCE

One insurance product that is often overlooked is homeowners coverage. The standard homeowners policy provides financial protection covering the physical structure of the home including personal property, personal liability and additional costs policyholders incur as a result of a covered loss.

It is your responsibility to make sure your home is adequately protected. If you fail to maintain adequate coverage, you could be penalized in the event of a loss. The standard homeowner policy is broken down into the following components:

Three-quarters of U.S. consumers prefer buying insurance products through agents and other trusted sources, but younger and higher-income consumers are more inclined to purchase products via the Web than through an agent and are more inclined to switch insurers, according to findings of a survey of more than 1,000 U.S. consumers conducted by Burmuda-based Accenture.

Accenture commissioned a survey of 1,005 citizens at least 18 years of age who own at least one insurance product. The online survey was designed by Accenture and conducted by Lightspeed Research in April 2009. Respondents were representative of the population in gender, age, income and region.

Overall key findings include:

* Consumers prefer to buy insurance products through an agent rather than online. Nearly three quarters (73%) said they prefer to buy auto and home insurance products from an agent, and three-quarters (75%) prefer to buy life products from an agent or another trusted source, such as an employer or financial advisor.

* Younger and more affluent customers were more inclined to purchase products via the Web versus purchasing products through an agent. The survey showed that 39% of consumers aged 18 to 24 and 28% of consumers in the higher-income bracket with incomes above $60,000, said they would prefer to buy insurance products online versus with an agent. Even more were inclined to purchase auto and home products online; 43% of consumers aged 18 to 24 and 39% of consumers aged 25 to 34 said they are more likely to buy auto and home products online.

* Two-thirds (68%) of auto and home consumers said they do not have sufficient income to pay the bill, and more than half (53%) said they feel they are paying too much for their policies.

* One quarter (25%) of consumers said they do not feel they have adequate information about the impact that the economy will have on their life policies, and the same number said they are interested in receiving more information regarding their life insurance. Of the more than three-quarters of respondents (79%) who said they are not considering purchasing a new life insurance product in the next 12 months, 80% said they see the benefit of purchasing a new product but don’t plan to purchase.

One in six (17%) respondents are “in play,” meaning they are considering purchasing an auto or home insurance policy with a new insurer over the next twelve months with the primary goal of cost savings (46%). Younger and more affluent customers were more inclined to switch insurers. Consumers aged 18 to 24 (29%) and 25 to 34 (27%) were more likely to switch when compared with elder groups. Additionally, consumers with incomes above $60,000 (22%) were more likely to switch compared with consumers who had incomes below $60,000 (13%).

* Consumer confidence in auto and home insurance carriers was found to vary by age with younger consumers questioning their insurance companies’ ability to provide sufficient coverage for them during the current economic times. Of individuals aged 18 to 24, 43% either had some concerns or didn’t have confidence in their carriers’ ability to provide coverage, compared with just one quarter of those (26%) in the 45+ age groups.


“Product complexity and customer service appear to be a driving force behind consumers’ preference for agents and their resistance to new insurance purchases,” said Michael Costonis, director of Accenture’s Insurance practice in North America . “The promise of the Internet is strong, yet insurers have lagged behind other industries in harnessing it to improve customer acquisition and retention. Insurers have an opportunity to attract younger and higher-income consumers to more straightforward products via the Web. Distribution needs to match customer’s needs and insurers need to take a targeted approach for younger and higher-income consumers.”

“Customers are looking for advice and guidance on how the economic crisis affects them individually, but they don’t seem to be getting the right information from their agents,” said Pierre-Louis Seguin, managing director of Accenture’s Life Insurance practice in North America . “Products are simply too complex for customers to understand. Insurers need to enhance agent training to ensure proper explanation of the coverage, benefits and value of their products. Insurers have an opportunity to capture the 18 to 34 year- old market, the next generation of insurance buyers, by simplifying products for online sales.”

Sapiens International Corporation N.V. (NASDAQ and TASE: SPNS) ("Sapiens" or "Company"), a leading global provider of innovative business solutions that modernize business processes and enable insurance organizations to adapt quickly to change, and a member of the Formula (NASDAQ: FORTY and TASE: FORT) Group, today announced its results of operations for the first quarter of 2009.

    Highlights for Q1 2009

  - Revenues increased by 2% to $10.7 million compared with $10.5 million
    in Q1 2008

  - Continuous success of Company's growth plan with the tenth consecutive
    quarter of operating profit, which totaled $1.1 million, a 155%
    increase compared with $423,000 in Q1 2008

  - Third consecutive quarter of net income, reaching $1.0 million compared
    with a $1.2 million net loss in Q1 2008.

  - In January 2009 the Company has repurchased approximately $0.4 million
    nominal value of its convertible debentures (series A), thus reaching a
    total repayment to-date of approximately 80% of the total issued
    series.

Roni Al-Dor, President and CEO of Sapiens, commented, "In the first quarter of 2009 we continued the growth momentum of all operating parameter despite the challenging world-wide economical environment - our revenues increased by 2% to $10.7 million compared to the same period of 2008. The increase is a result of further implementation of our solutions by existing and new customers. We achieved yet another quarter of operating income and our third consecutive quarter of net income, reaching $1.0 million compared with a net loss of $1.2 million Q1 2008.

"We are witnessing increased interest from the market in our INSIGHT for Closed Books and Reinsurance platforms. As the recent economical climate and increasing regulatory requirements are driving insurance companies to seek ways of achieving lower policy administration costs, whilst actively managing their risks, we offer them our comprehensive INSIGHT suite of insurance solutions. This suite includes a solution for both operational excellence, through our INSIGHT for Closed Books platform, as well as a Re-Insurance web-enabled solution that streamlines and reduces the cost of handling all reinsurance functions".

"Looking forward, with proven solutions, improved financial performance and a broad customer base, I believe that we are well positioned to take future traction in our space."

Reconciliation between U.S. GAAP and Non-GAAP results is summarized in the following table. For a complete reconciliation, please refer to the tables at the end of this release.

    U.S. Dollars in thousands, except per share amounts

                                               For the three months ended
  U.S GAAP basis                             03/31/2009        03/31/2008
                                             (Unaudited)      (Unaudited)
  Revenues                                       10,744            10,491
  Operating profit                                1,080               423
  Net income (loss)                               1,018            (1,200)
  Basic earning (loss) per share                   0.05             (0.06)
  Diluted earning (loss) per share                 0.05             (0.06)

  NonGAAP
  Revenues                                       10,744            10,491
  Operating profit                                1,276               522
  Net income (loss)                               1,214            (1,101)
  Basic earning (loss) per share                   0.06             (0.05)
  Diluted earning (loss) per share                 0.06             (0.05)

U.S. GAAP results include amortization of capitalized software developments, capitalization of software development costs, and stock-based compensation expenses.

The $31.4 billion general operations budget approved by the legislature filled a $9 billion shortfall with federal stimulus money, one-time transfers and more than $4 billion in cuts to education, health and state programs. The budget includes many cuts to health care and education and slashes $1028 billion from state employee salaries, health benefits, and other compensation, resulting in 7,000 to 8,000 lost government and public school jobs. The state's K-12 system will lose $800 million in state funds, although about half of that figure will be made up by federal stimulus aid going directly to school districts. While higher ed money has been cut as well, the state has authorized two and four year institutions to shift the burden to students by raising tuition by 7% to 14%. The $7.5 billion transportation plan, however, passed with only 8 senators voting "nay" and is projected to create 49,000 jobs. The bill puts $4 billion into more than 400 road projects over the next two years.

With no state income tax and a regressive, sales-tax-dependent tax structure, revenue generation for state and local governments is a perennial hot topic in Washington State. Lawmakers considered but failed to act on a proposal to create an income tax for the state's top earners, those earning more than $500,000. Tax fairness proponents plan to renew the effort as part of a broader campaign to improve the state's tax structure in subsequent years. Still, lawmakers approved SB 5433, which gives local governments, in particular, a little more flexibility in raising revenue. In most cases, the bill requires officials to gain local voter approval for any levy or fee increases. One positive provision allows King County, which includes Seattle, to add a 7.5 cent property tax for transit projects.

At the last minute, lawmakers passed SB 5963, sponsored by Sen. Jeanne Kohl-Welles, to give employers a tax break on the premiums they pay into the state's unemployment insurance system. Earlier in the session, legislators passed HB1906, which increases jobless benefits to $225 per week through the end of the year.

Health Care: This year, lawmakers sought to preserve the state's health infrastructure so that temporary cuts to programs in eligibility and reimbursement levels can be quickly restored when the state's budget condition improves.

• Painful Cuts: $2 billion in federal stimulus funding helped the state to minimize cuts to the Medicaid program, but services for adults were curtailed and reimbursements to providers were reduced. Full implementation of a voter-approved initiative to increase training for long-term care workers was delayed a year. In response to the state's budget woes, lawmakers approved a $225 million cut to the Basic Health Plan, which serves 102,000 low-income residents and provides subsidized health benefits. As a result of the cuts, 40,000 residents will lose coverage by the end of the year. The state is currently seeking advice from advocates on how to implement the cuts.
• Covering Kids: Despite harmful cuts in eligibility and reimbursement to many programs, lawmakers were able to preserve a prior commitment to achieve health care for all kids and place the state on the path to health-care-for-all within 5 years. Lawmakers passed HB 2128, sponsored by Rep. Larry Seaquist, to confirm the state's goal of ensuring all kids have health coverage by 2010. The measure officially named the state's kids program, Apple Health for Kids. Its new provisions streamline enrollment measures (of the 75,000 uninsured children in WA, almost half are eligible but don't know it), take advantage of the federal re-authorization of the State Children's Health Insurance Program, and modify some requirements for a twin program that will start by 2010 allowing families above 300% of poverty to buy Apple Health coverage for their children. While families below 300% of poverty will pay relatively low-cost sliding scale premiums for the program, there was concern that the level of benefits would have made the program too expensive for parents above 300%, so the required benefits have been pared down for higher income families that may elect to buy into the program.
• A Reform Commission for Universal Care: In addition to moving forward on kids' care, Washington lawmakers committed to achieve health care for all Washingtonians by 2014 by passing SB 5945. Sponsored by Sen. Karen Keiser, the measure creates a reform advisory group to further study and develop health care reform legislation and it articulates key priorities for reform, including the choice of public or private health plans. Additionally, the bill directs the new reform advisory group to monitor state and federal progress towards health care reform and to specifically collaborate with federal lawmakers. The bill also directs the state to seek a Medicaid waiver to expand eligibility to low-income adults.
• Promoting Efficiency: Other notable health care achievements in 2009 include the Health Efficiencies Act (SB 5346), which will bring providers together to define uniform administrative standards and procedures around claims reimbursement, prior authorization and other utilization systems, and establishing a standardized and electronic process to verify patients' insurance eligibility and coverage. As Sen. Keiser notes, 30 cents of every health care dollar is spent on administration, "this legislation is intended to change that." SB 5501 will bring stakeholders together to develop processes for the safe and secure exchange of clinical data and improve patients' access to and control of their health care information.
• Other Bills: SB 5360 creates a grant program to help community-based coalitions serve uninsured and under-insured adults and children. SB 5892 will promote use of generic medications by state programs while ensuring patients' quality of care and use of quality drugs. HB 2105 creates a work group to create guidelines for the appropriate use of diagnostic imaging, like MRIs and CAT scans, to ensure these costly services are used when necessary. SB 5891 will test primary care medical home reimbursement pilot projects. And, to improve hospital safety, lawmakers passed two bills to beef up requirements on hospitals to publicly report medical errors and to conduct unannounced inspection of hospitals (HB 1123, HB1021). A key goal of the measures is to reduce hospital-based infections, notably staph, or MRSA, which can be prevalent in hospitals.

National Popular Vote: Washington became the 5th state to join the "electoral college pact" by enacting SB 5599 to commit the state's 61 electoral college votes for president to the winner of the national popular vote. Even though 77% of Washingtonians support national popular vote, opponents to the new law are waging a campaign to put the question to the voters in November.

Broadband: Awaiting action from the Governor, HB 1701 aims to bring new high-speed Internet access to residents, businesses, educational institutions, public health and safety services, and community organizations in under-served parts of Washington State, as well as increase broadband adoption throughout the state.

Gay and Lesbian Rights: Opponents of recognizing same-sex relationships plan to file a referendum today that repeals the latest addition of rights to the state domestic partners registry. The Legislature passed Senate Bill 5688, which substantially expands the registry to include all state rights accorded to married couples. The registry has more than 5,000 couples, most are same sex couples though some are heterosexual domestic partners.

Foster Parenting: Lawmakers enacted several bills to strengthen foster parents' rights and assure the best interests of children in the state's foster system. To create more stability for foster children, lawmakers passed HB 1782 to allow the courts to consider long absences by biological parents when deciding whether to end visitation rights and SB 5431 requires that children who are removed from their biological parents for a second time be placed with foster parents they know. Another bill, SB 5803, puts foster families on notice that if an adopted foster child needs mental health services in the future, the state will not pay for the care through the foster system. Such transparency is important, but advocates are hoping to get the state to someday pay for mental health services for adopted foster children, who often need such services because of high instances of abuse or drug use by their biological parents.

Newspaper Industry: HB 2122 provides the state's struggling newspaper industry with a temporary break on the state's main business tax. Under the proposed measure, the business and occupation tax on newspapers would be cut by 40 % through 2015.

Any time of year can be the right time to protect yourself, your family and your home from the damage a flood can cause. If you live in a high-risk area, it's a good idea to start by exploring safeguards and additional insurance.

According to a 2008 survey by the Insurance Information Institute, only 17 percent of Americans purchased flood insurance. On average, it can take up to 30 days for any flood policy to become effective, so considering this additional policy should be something every homeowner does prior to the summer months.

"Claims related to water are among the leading property damage losses in personal insurance," said Jim Kane, HUB International Personal Insurance.

The federal government offers federally backed flood insurance under the National Flood Insurance Program (NFIP), making flood insurance an affordable policy--with flexible building and contents coverage options--in areas of varying risk.

Claims for flood insurance may be made any time there is flood damage to a covered structure, structural component, utilities, or contents covered by contents coverage.

It is important to work with the right insurance professional to assess specific needs and the right policy choice based on location, limits and several other factors.

"The stars are aligned" for health care reform this year, President Obama said Wednesday.

We'll soon find out. The signs are awfully encouraging: House Speaker Nancy Pelosi has set an ambitious time frame of July to get legislation on the floor. Instead of fighting tooth and nail against any changes, representatives of the health care industry have pledged to cut cost increases by 1.5 percent per year, potentially saving $2 trillion over the next 10 years. And even some businesses are nominally on board: Obama met with executives from enormous companies that have successfully cut their own health care costs, including Safeway, Johnson & Johnson and Microsoft.

Still, trouble lurks just below the surface. This week, the Obama administration reported that the recession has decimated the funds for Medicare and Social Security. Both funds are now expected to run out of money years earlier than had been predicted. It may be true that the fragility of both systems simply underscores the need for reform, but critics will use their problems as an attack line, and it could be a good one.

Also, the health care industry may find it easier to be on board now, before there are too many specific details about the reforms. The odds are quite good that they'll hate the most important component of reform - the establishment of a public insurance program, in addition to existing private plans - and lobby hard and dirty against it. We're not looking forward to watching "Harry and Louise, Part Two."

Finally, neither Congress nor the president has spelled out an answer to the most nagging question about health care reform: how we're going to pay for it. This is no small question. Independent experts have put the cost for reform at about $1.5 trillion over 10 years, and much of that has to be paid up-front. How the country pays this bill is likely to be one of the toughest negotiation points of the discussion.

We're not enthused by the prospects of the few ideas that have been floated thus far. Taxing sugary soft drinks, for instance, would do great things to lower the nation's sky-high rates of obesity and diabetes. Unfortunately, it may be politically impossible: Last year, New York's governor, David Paterson, got clobbered when he suggested it for his state. How many industries can the administration afford to infuriate on the way to getting this reform passed? Some members of Congress also want to tax employer-provided health care benefits. Obama opposed such taxes during his campaign, and for good reason: They'll encourage employers to dump their employees on the public payroll.

There are good ideas for raising revenue, like reversing tax breaks on flexible-spending accounts, but they might get lost in the din. If he wants this to get done right, Obama is going to have to engage Congress on every aspect of the legislation. Unfortunately, for now, the White House is being relatively quiet on specifics, preferring to let Congress hash out the details. You'd think Obama would have learned his lesson with the stimulus package. That legislation almost got derailed because Obama wasn't paying enough attention to the projects legislators were trying to fund in the name of "stimulus." The country can't afford to take that kind of risk with health care.

But back to those encouraging signs: Both Congress and Obama seem to recognize how important it will be to win the battle of public opinion. In recent speeches, Obama has correctly pointed out that escalating health care costs are a large part of the reason for the federal deficit. Congress, meanwhile, has latched onto the language of "choice" and "affordability," two words that resonate well with the public.

This last point goes deeper than marketing: Americans are deeply unhappy with the current health care system, but they're also terrified that the government might make the wrong changes. There won't be any reforms if Congress and Obama don't find ways to assuage Americans' fears about being able to continue their relationship with a family doctor, or getting the medications they need for a health condition.

For the health care industry to get on board, even if it's only in theory, suggests that it realizes the old scare tactics won't work this time. But new ones might - so Obama and Congress had better make sure they get this right.

Today is Sunday, May 17, the 137th day of 2009. There are 228 days left in the year.

Today's Highlight in History:

On May 17, 1954, the U.S. Supreme Court unanimously struck down racially segregated public schools in its Brown v. Board of Education of Topeka decision.

On this date:

In 1792, the New York Stock Exchange had its origins as a group of brokers met under a tree on Wall Street.

In 1814, Norway's constitution was signed, providing for a limited monarchy.

In 1849, fire erupted in St. Louis, resulting in the loss of three lives, more than 400 buildings and some two dozen steamships.

In 1875, the first Kentucky Derby was run; the winner was Aristides.

In 1938, Congress passed the Second Vinson Act, providing for a strengthened U.S. Navy. The radio quiz show "Information, Please!" made its debut on the NBC Blue Network.

In 1939, Britain's King George VI and Queen Elizabeth arrived in Quebec on the first visit to Canada by reigning British sovereigns.

In 1946, President Harry S. Truman seized control of the nation's railroads, delaying — but not preventing — a threatened strike by engineers and trainmen.

In 1973, the Senate began its televised hearings into the Watergate scandal.

In 1980, rioting that claimed 18 lives erupted in Miami's Liberty City after an all-white jury in Tampa acquitted four former Miami police officers of fatally beating black insurance executive Arthur McDuffie.

In 1987, 37 American sailors were killed when an Iraqi warplane attacked the U.S. Navy frigate Stark in the Persian Gulf. (Iraq and the U.S. called the attack a mistake.)

Ten years ago: The Supreme Court banned states from paying lower welfare benefits to newcomers as opposed to longtime residents. Labor Party leader Ehud Barak unseated Prime Minister Benjamin Netanyahu in Israeli elections. Makah Indians in Washington state harpooned a gray whale for the first time in 70 years.

Five years ago: Massachusetts became the first state to allow legal same-sex marriages. Abdel-Zahraa Othman, also known as Izzadine Saleem, head of the Iraqi Governing Council, was killed in a suicide car bombing in Baghdad. More than 100 people were killed in a prison fire in northern Honduras. Transsexuals were cleared to compete in the Olympics for the first time. Actor Tony Randall died in New York at age 84.

One year ago: Sen. Edward Kennedy, D-Mass., was flown to a Boston hospital after suffering a seizure at his Cape Cod home. (He was later diagnosed with a cancerous brain tumor.) Nearing the end of his five-day Mideast trip, President George W. Bush held a rapid-fire series of diplomatic meetings at the Red Sea resort of Sharm El-Sheik in Egypt. Kentucky Derby winner Big Brown ran away with the Preakness. (However, the horse's Triple Crown quest ended three weeks later when he finished last in the Belmont Stakes.)

Today's Birthdays: Actor-director Dennis Hopper is 73. Actor Peter Gerety is 69. Singer Taj Mahal is 67. Singer-songwriter Jesse Winchester is 65. Rock musician Bill Bruford is 60. Singer-musician George Johnson (The Brothers Johnson) is 56. TV personality Kathleen Sullivan is 56. Actor Bill Paxton is 54. Boxing Hall of Famer Sugar Ray Leonard is 53. Actor-comedian Bob Saget is 53. Sports announcer Jim Nantz is 50. Singer Enya is 48. Talk show host-actor Craig Ferguson is 47. Rock singer-musician Page McConnell is 46. Singer-musician Trent Reznor (Nine Inch Nails) is 44. Actress Paige Turco is 44. R&B musician O'Dell (Mint Condition) is 44. Actor Hill Harper is 43. TV personality/interior designer Thom Filicia is 40. Singer Jordan Knight is 39. R&B singer Darnell Van Rensalier (Shai) is 39. Actress Sasha Alexander is 36. Rock singer-musician Josh Homme is 36. Rock singer Andrea Corr (The Corrs) is 35. Actor Sendhil Ramamurthy ( "Heroes") is 35. Actress Rochelle Aytes is 33. Singer Kandi Burruss is 33. Actress Kat Foster ("'Til Death") is 31. San Antonio Spurs guard Tony Parker is 27. Actor Tahj Mowry is 23. Actress Nikki Reed is 21. Actress Leven Rambin is 19. Actress Samantha Browne-Walters is 18. Actor Justin Martin is 15.

Thought for Today: "I always have a quotation for everything — it saves original thinking." — Dorothy L. Sayers, English author (1893-1957).

Q. We are a family of four, with 2 daughters, ages 7 and 18. I read your column in Sunday's paper regarding term or cash value life insurance. Reading your column motivated me to analyze my family's life insurance situation, and I was wondering if you could answer a few questions.

My husband bought a Flexible Premium Multifunded Life Insurance policy with a specified face amount of $125,000 on September 2000. We have been paying monthly premiums of 115.00 every month. (That's about $10,000 since inception!!!!!!)

I am thinking this is not a good idea. I want to stop paying for it because I think we have paid enough. However, I do not understand the statements they send (I honestly believe they make it confusing on purpose) and I am afraid that if I stop paying, we will lose the $10,000 we have paid so far.

Do you have any recommendations for me? I am very confused. What questions should I be asking the insurance people? I am afraid that when I speak to them, I get very little information.

Millie Bu, Weston

A. Insurance can be one of the most confusing purchases anyone can make, and the insurance companies and agents don't seem to make it much easier, although many try. Where's the agent who sold this to you? The insurance company (which I have deleted for obvious reasons) markets their insurance through insurance brokers who are paid a commission to sell you this policy. They're also paid an ongoing fee to service your policy, which means answering all your questions. It's called customer service, something all agents need to do well to succeed. So start with your agent. His or her name should be on your policy, in case you don't remember.

Now, at the risk of irritating a lot of insurance agents out there, please don't look at your life insurance policy as an investment vehicle. It's to pay your heirs when one dies, not to retire you. Part of the $1,360 you have been paying into your policy each year is paying to be insured, plus a little extra goes into a savings account to help pay for the insurance down the road. Ask your agent (or the company if you can't find him) what the cash value is, and what interest does it pay you. Will the premiums stay the same and cover the insurance forever? If not, for how long? What if you stop? The premium is flexible. What does that allow you to do without hurting the policy? Does your husband even have enough insurance? Would a term policy for 20 years be a better solution? What would that cost? And Millie? Get a term policy for yourself as a gift to your family. It'd cost a ton to find a Mary Poppins if you weren't here, and term policies are cheap.

Most of all, please try to find someone whom you can have confidence in, in case your agent doesn't do it for you. There are a lot of good people out there happy to have your business.

A decision by troubled automaker General Motors to drop 20 percent of its dealers is due in part to an oversized network that created stiff internal competition and gave shoppers too much leverage to talk down sticker prices, hurting chances for future sales.

GM's announcement Friday is more bad economic news for dealers, communities and businesses still reeling from Chrysler's similar nationwide dealer cuts a day earlier. Both automakers are scrambling to reorganize and stay alive in a severe recession that has devastated sales of cars and trucks.

Several hundred of the roughly 1,100 GM dealers already knew they were headed for closure, but most of them learned for the first time Friday. The dealerships will be eliminated when their contracts end late next year.

"We're 98 years old. We're two years from a hundred, and I don't want to go out at 99 years," said Alan Bigelow, whose family runs a Cleveland-area Chevrolet dealer that learned it was on GM's hit list.

Including Chrysler's decision Thursday to eliminate a quarter of its own, about 1,900 dealerships learned in a matter of 48 hours that they would be forced either to sell fewer brands or close altogether.

The National Automobile Dealers Association, an industry group, says the GM and Chrysler cuts combined could wipe out 100,000 jobs.

Chrysler LLC is already in bankruptcy protection, and industry analysts say General Motors Corp. is making its cuts now in preparation for a bankruptcy filing June 1. The company says it would prefer to restructure out of court.

GM declined to reveal which dealers will be eliminated. Many dealers vowed to fight, first through a 30-day company appeal process, then possibly in court.

GM's dealers are protected by state franchise laws, and the company concedes it would be easier to cut them if it were operating under federal bankruptcy protection. GM says it's trying to restructure outside of bankruptcy because of the stigma of Chapter 11.

Chrysler dealers have fewer options because the company has already filed for bankruptcy protection, and federal bankruptcy judges generally trump state law. And Chrysler said on Thursday that its cuts were final.

GM outlined a plan to cut about 40 percent of its 6,000-dealer network by the end of 2010 in hopes of getting the company back on its feet. Besides the 1,110 dealership cuts, the company will shed about 500 dealerships that market the Saturn, Hummer and Saab brands, which GM plans to phase out or sell.

And when the surviving dealers' contracts are up in late 2010, GM will cut still more by not offering renewals to about 10 percent of the dealers who are left. Dealers could stay open selling used cars or other brands, but GM and Chrysler cuts will still leave cities across the U.S. with empty buildings, vacant lots and perhaps hundreds of thousands of dollars in lost tax revenues.

FedEx letters bearing the bad news began arriving Friday morning at GM franchises around the country. The letter states that dealers had been judged on sales, customer service scores, location, condition of facilities and other criteria.

While the targeted dealers represent about 20 percent of GM's total, they make only 7 percent of its sales, the company said.

The cuts will allow the surviving dealers to expand the size of their markets, so they have a better chance of staying healthy and attracting private investment, said Mark LaNeve, GM's North American vice president of sales and marketing.

"Over time, they just can't afford to invest in their business to the degree the competition has," LaNeve said.

Toyota, for example, generally has larger and newer showrooms and service departments than GM and Chrysler dealers — making those dealerships more attractive to potential buyers.

The Obama administration's auto task force, which is overseeing the GM and Chrysler restructuring because both have received billions of dollars from the government, was aware GM would cut dealers, LaNeve said. But he stressed the company made the decision on how many and where.

Chrysler is aiming to close its nearly 800 dealers by June 9, and those outlets may try deep discounts to clear out their remaining inventory. But in the long run, prices for cars and trucks will probably rise for customers as dealerships disappear.

"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.

As GM and Chrysler lost market share to Japanese and other overseas brands, they ended up with too many dealers. So did Ford Motor Co., which has managed to stay healthier than either of its Detroit siblings.

In the 1980s, GM, Chrysler and Ford accounted for more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.

Bigelow was stunned to get his termination letter. He said he believed the dealership was meeting all of GM's criteria to stay in business. He said sales had dropped in the recession — but he didn't know of many dealers who were doing better.

Many of the dealership's 45 employees have been there for 30 years or more. He said they pledged to stay and fight the closing "until there's no more fight left."

The world doesn't need another bank, it needs a better bank. This philosophy is at the heart of the launch of Ally, a new brand for a U.S. online bank designed to disrupt the status quo and challenge win-lose practices in the banking industry.

Ally Bank is a unit of GMAC Financial Services, which recently became a bank holding company. It offers a variety of savings products, including no-penalty certificates of deposit (CDs), online savings accounts and money market accounts. "We are launching a new brand with a new approach of treating customers with total transparency," said GMAC Chief Executive Officer Al de Molina. "Unlike other banks which depend on fees as a business model, we want to make money with customers, not off customers."

The transition of GMAC Bank to Ally Bank will be seamless for current bank customers. "Both current and new customers will benefit from our improved online banking experience, the avoidance of teaser tactics, true no-penalty CD products, and rates among the best in the country for all of our savings products," de Molina said.

Building a Better Bank

Ally Bank builds on the expertise of the GMAC team's nearly 90 years of customer financial services experience to take banking in a new direction:

• No-Penalty CDs with No Strings Attached - Customers can withdraw funds prior to the maturity date without a fee and transfer the funds to any account at any bank without penalty.
• Sleeping Money Alerts - While most banks are happy to let customer deposits earn minimum interest, Ally Bank will send an email to customers when funds have been idle for three months and when the customer can be earning a higher rate of return.

• No Teaser Rates - Ally Bank will not "bait and switch" depositors with teaser rates that later change on CDs or other products.

• Leading Bank Rates - Ally Bank is committed to always offering rates among the best in the country across all savings products. The Ally Bank Website clearly posts a rate comparison tool, enabling customers to check out the competition.

• No Sneaky Disclaimers - Ally Bank provides complete transparency on rates and terms, and won't hide behind legalese and jargon.

• 24/7 Customer Service - Recognizing that not all questions can be answered by an automated system or during traditional business hours, Ally Bank offers around-the-clock access to a call center agent for customer assistance.

• No Minimums - There are no minimum deposits or minimum balances required at Ally Bank.

"The Ally brand is founded on three principles: Talking straight, doing what is right for the customer, and being obviously better than the competition," said Sanjay Gupta, chief marketing officer. "It is a promise from our company to our customers. We believe that being direct and honest is the best way to build lasting customer relationships."

Gupta added, "Given the recent financial market turmoil, people are looking for a safe, honest and efficient place to save and grow their money. Ally Bank offers that place."

The company developed the Ally brand following extensive conversations with customers who clearly expressed the need for a trusted bank partner. "The name Ally aptly fits the character of the brand," Gupta said. Today, the company launched a new Web site,along with its new 24-hour customer call line, 1-877-247-ALLY (1-877-247-2559). Depositors can open bank accounts online, by phone or by mail.

Ally Bank is insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor through December 31, 2009.

Seattle-based HomeStreet Bank today signed a cease-and-desist order with the Federal Deposit Insurance Corp. and the Washington Department of Financial Institutions, due to weakened financial conditions from loans to the residential and development industries.

ARROWHEAD General Insurance Agency, Inc. announced that its board of directors has elected Steve Bouker as president of Arrowhead, effective May 1, 2009. Bouker joined Arrowhead in 2000 and currently serves as president of Arrowhead's personal lines division and oversees American Claims Management, Inc., a wholly owned claims third party administrator subsidiary of Arrowhead. He will retain those roles along with his new responsibilities of overseeing the workers' compensation, marketing and human resource departments. Bouker has also been an Arrowhead board member since 2005.

"I'm excited about the opportunity to assume an expanded role at Arrowhead," Bouker said. "Since joining the company nine years ago I've developed a special appreciation for the unique culture here and I'm looking forward to working with all our employees to continue to make our company great. The strength of any company comes from its people and culture and I'm proud to be part of the Arrowhead team."

Arrowhead's chief executive officer, Chris Walker, said, "Steve has made tremendous contributions to our success over the years through his leadership, relationship building, mentoring and professional and ethical qualities. He is the right person to be the president of Arrowhead with his results-oriented management style and extensive industry knowledge."

Before his latest appointment, Bouker had been serving as president of Arrowhead's personal lines division since January 2004 and was elected to the Company's board of director's in 2005. As president of the personal lines division, he will continue to oversee Arrowhead's personal property, auto, motorcycle and residential earthquake programs. Previously, Bouker founded the company's residential earthquake program in 2000.

Prior to joining Arrowhead, Bouker was a co-manager of a start-up insurer, Pacific Select Insurance Company. Bouker has held senior positions at several major companies, including Chubb, Fireman's Fund and USF&G.

Arrowhead General Insurance Agency, Inc., headquartered in San Diego, is an independent national insurance program manager for commercial and personal products and is one of the largest privately held general agencies in the United States with $716 million written premium in 2008. Arrowhead's relationships with strong insurance carriers provide stability for its nationwide network of producers. We invite insurance agencies and companies from coast to coast to grow with us. For more information about our products and services, please visit us at ArrowheadGrp.com

American International Group Inc (AIG.N) agreed to sell a prized Tokyo property to Nippon Life Insurance Co, Japan's largest life insurer, for $1.2 billion, in one of its largest asset sales since a September rescue.

Nippon Life will pay cash for the property, which is situated next to the Imperial Palace and has about 1 acre of land and the AIG Otemachi Building, AIG said on Monday.

The transaction is expected to close during the second quarter.

The price for the building is in line with what was expected when it was put on the market in February.

The sale is part of a larger divestiture program by AIG, as it looks to sell real estate and other assets to pay back the U.S. government.

The government has committed some $180 billion in AIG's rescue, including about $85 billion in loans that the insurer is trying to repay with these divestitures.

AIG said in March it was also weighing the sale of its headquarters in New York.

In April, it announced the sale of its U.S. auto insurance business to Zurich Financial Services for $1.9 billion, marking its largest asset sale since its rescue.

Carteret County homeowner D.W. Dawkins is among the first of North Carolina's coastal residents to see just how much a May 1 hike in insurance rates will impact his wallet.