Insurance news

mattd mattd at useoz.com
Sun Jan 6 01:50:21 PST 2002


Atlantic Coast Life Insurance Co. and Liberty Life Insurance Co. have been 
ordered by A South Carolina insurance department director Ernst Csiszar to 
pay out a combined $3.1 million to black policy holders that had been 
charged higher premiums than white policy holders for decades.

Some company officials claimed they were using "lifestyle" as justification 
for the higher premiums, but Csiszar said it was obvious upon investigation 
that it was a simple black/white issue.
$100b threat to economy
By CHRIS TINKLER and TONY RINDFLEISCH
06jan02
A $100 billion insurance crisis is threatening to sabotage Australia's economy.
Runaway premiums and unprecedented court decisions have undermined 
businesses, cost jobs and forced doctors out of specialist roles.
They are also killing off sports events and community activities.
The total cost of all classes of insurance premiums is estimated to have 
jumped from about $25 billion last year to as much as $30 billion this year.
And the bushfire crisis is expected to add several billion dollars to that 
bill.
Insurers are also increasingly refusing to take on certain groups or events 
considered too high a risk.
That means the real cost of the insurance woes may run into hundreds of 
billions of dollars as jobs, businesses and community events are lost.
Those seeking insurance for public and product liability or professional 
indemnity are being worst hit, with premiums increasing by up to 1000 per cent.
Insurers blame record compensation payouts and growing claims in an 
increasingly litigious society, saying that until last year they had 
maintained unsustainably low premiums.
The September 11 terrorism attacks, the collapse of insurance giant HIH -- 
responsible for up to 40 per cent of the public liability market -- and the 
costly Ansett and Avonwood Homes debacles are also cited.
Calls for an overhaul of the system from several peak bodies, with some 
pushing for caps on payouts, come as:
MEDICAL insurance premiums for families are set to rise.
THE WORLD'S biggest ski race, the Southern 80, on the Murray River, this 
week collapsed under the unsustainable insurance burden.
BUSHFIRE  payouts are expected to top $70 million, with insurers having 
already received thousands of claims.
SEPTEMBER 11 payouts are predicted to be up to $140 billion.
TERRORISM cover will be written out of insurance policies from this month 
in the aftermath of the attacks on the US.
A RECORD negligence payout of almost $17 million to a woman paralysed after 
her car skidded off a gravel road has raised the bar for individual claims.
THE MEDICAL profession is reeling from increasing payouts, including $14 
million in November to cerebral palsy sufferer Calandre Simpson for a 
botched forceps delivery.
SPECIALISTS such as brain surgeons, obstetricians and gynaecologists are 
quitting because indemnity premiums are rising to as much as $250,000 a year.
PUBLIC and product liability claims jumped from 55,000 in 1998 to 88,000 
two years later.
GRASS ROOTS football administrators warn that the game could be severely 
undermined by rising premiums, with several clubs folding and more to follow.
HUNDREDS of other sports groups and events, carols services, Christmas 
street festivals and parades, including key events in Warburton and Mont 
Albert, have been cancelled due to unaffordable public liability premiums.
VICTORIA'S tourism industry council says soaring public liability premiums 
during the past six months -- up by as much as 600 per cent -- and 
increasing flight costs have further destabilised the stricken industry.
PREMIUMS for home and car insurance are expected to rise by an average of $30.
The Prime Minister, John Howard, has announced a special summit to look at 
the professional indemnity issue which has sent shock waves through the 
medical professional.
Capping payouts will be one controversial option examined, Federal 
Assistant Treasurer Senator Helen Coonan said.
A range of stakeholders, including the legal, insurance and tourism 
industries and sports and community groups, have also called for a national 
forum to investigate public and product liability.
A State Government spokesman said the Federal Government had been asked to 
convene a forum of all states to tackle public liability problems.
Noel Pettersen, National Insurance Brokers Association chief, said unless 
there was action to halt premium increases and lack of cover, Australia 
would be in an insurance crisis within a year with economic damage mounting 
to more than $100 billion.
Alan Mason, executive director of the Insurance Council of Australia, said 
unprecedented events such as the collapse of HIH and the September 11 
attacks had rewritten the industry textbook.
Mr Mason said that for every $100 raised in premiums, $162 was being paid 
in claims in some sectors.
Law Council of Australia president Tony Abbott said he did not believe 
claims had risen much in recent years and that premium increases were due 
to fewer insurers.
The Australian Compe tition and Consumer Commission has been investigating 
premium increases and is due to report to the Federal Government next month.





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