Auto Insurance
Making a Difference; Moving In on First Executive
Since taking office in January as California’s first elected insurance commissioner, John Garamendi has tackled a variety of complex and politically bruising issues, among them the long-stalled rollback in automobile insurance rates mandated by voters here more than two years ago.
But Mr. Garamendi, a 46-year-old former state senator, has now waded into an even more turbulent situation. On Thursday, he directed the California Department of Insurance to seize control of the Executive Life Insurance Company, the largest operating subsidiary of the First Executive Corporation. First Executive’s chairman, Fred Carr, had built Executive Life into one of the nation’s largest insurance companies by investing heavily in high-yield “junk” bonds. But the company’s junk bond portfolio has been battered by defaults and declining prices, leaving the insurer in precarious financial condition.
It was the largest regulatory takeover yet of an insurance company. Mr. Garamendi said he hopes to nurse Executive Life back to health, but he acknowledged that it would be “the biggest and most complex rehabilitation in the industry’s history.”
More : query.nytimes.com
Leave a comment
Comments Already Given »
No comments yet.
Related Articles from Auto Insurance
Wind damage covered by most insurance policies
Home and auto insurance claims began flooding in Friday as storm-battered residents began picking up the pieces and assessing property damage. The total damage cost to the region may top $181 million, which is the adjusted-for-inflation sum of the damage caused by a similar storm that wreaked havoc in 1993. The "mother of all wind storms" on Columbus Day in 1962 cost the region $1.6 billion in today's dollars, plus another $5 billion in downed timber. The three top insurers in the state -- State Farm, Farmers and Safeco -- began making catastrophe preparations in advance of the windstorm. Farmers flew in about
Auto insurance reform panel is on a slow road.
Governor Mitt Romney's bid to revamp the state's auto insurance system is running behind schedule, bogged down by a lawsuit filed by the state's leading insurer and a slow-moving task force plagued by political infighting and the complexity of the task. The lack of progress was evident yesterday when Insurance Commissioner Julianne M. Bowler held her annual hearing on whether she should stop setting auto insurance rates. Regulators and industry officials, who last year had hoped to be moving toward a competitive system by now, acknowledged yesterday that progress has been slow and the... Source : accessmylibrary.com
Making Bad Risks Good Business
Recently, an executive at State Farm said he could not make money selling auto insurance to speeders, hit-and-run drivers, drunken drivers and other menaces. "We love attitudes like that," said Bruce Marlow, chief operating officer of the Progressive Corporation. "Prejudices like that allow us to succeed." Progressive, the nation's 38th-largest property and casualty insurer, has earned an enviable living by committing what seems to be heresy: It specializes in covering drivers whose coverage has been rejected or canceled by other insurers. These pariahs not only include drivers with blemished records but also people rejected as too old or too young,
Anger Over Car Insurance Rates in Canada
Canada's auto insurers, squeezed by soaring injury claims, falling investment income and slow-moving regulators, are hitting drivers with huge increases in premiums. The public outcry has led politicians across the country to promise mandatory cuts in premiums and other reforms. That has left insurance executives wondering whether their industry, already flooded with red ink, will be the chief casualty, or whether their long campaign for regulatory change is finally paying off. Michael Donoghue, chief executive of the Allstate Insurance Company of Canada, a unit of the Allstate Corporation of Northbrook, Ill., said that while his company ''had posted disastrous results
California Regulator Takes Top Role in Insurance Crisis
John Garamendi, California's first elected Insurance Commissioner, stood before 500 angry policyholders of the failed Executive Life Insurance Company, answering their questions, trying to soothe their fears and getting a warm response when he promised, "I'm working for you." But almost in the next breath, Mr. Garamendi felt compelled to add that "I'm no miracle worker" when it comes to salvaging the wreckage of Executive Life. Policyholders, Mr. Garamendi told the subdued public meeting on Friday, still face the real risk of financial losses in the wake of his seizure of the Los Angeles-based insurer last month. And he repeatedly